On Monday, August 5, 2024, the North American stock markets experienced a significant crash, leading to widespread losses across major indices. The Dow Jones Industrial Average (DJIA) fell by over 1,000 points, a 2.6% drop, while the S&P 500 and Nasdaq saw declines of 3% and 3.43%, respectively. This downturn was the worst single-day performance since September 2022, and it was part of a broader global market sell-off.
Several factors contributed to the crash, most notably fears of an impending U.S. recession. A weak jobs report and disappointing manufacturing data raised concerns about the health of the U.S. economy. These worries were compounded by negative forecasts from major technology firms, which had a ripple effect on the markets.
The global economic situation also played a role. In Japan, the Tokyo stock market experienced a severe crash, with the Nikkei 225 dropping by more than 12%, its worst day since the 1987 crash. This was partially triggered by a surprise interest rate hike in Japan and a strengthening yen, which led to the unwinding of carry trades that had been supporting global markets.
The combined effects of these domestic and international factors caused a sharp increase in market volatility. The Cboe Volatility Index (VIX), often referred to as the "fear gauge," spiked to levels not seen since the early days of the COVID-19 pandemic, indicating heightened investor anxiety.
Overall, the crash reflected a complex interplay of economic indicators, global financial policy changes, and investor sentiment, all of which led to a dramatic downturn in market confidence [oai_citation:1,Crisis on Wall Street: Inside the Turbulent August 2024 Market Crash | Vantage](https://www.vantagemarkets.com/academy/market-crash-august-2024/) [oai_citation:2,Stocks tumble on US recession fears | Fox Business](https://www.foxbusiness.com/markets/us-stocks-august-5-2024) [oai_citation:3,List of stock market crashes and bear markets - Wikipedia](https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets).
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