Dow drops 860 points, and Japanese stocks suffer worst crash since 1987 amid US economy worries

NEW YORK — Nearly everything on Wall Street is tumbling Monday as fear about a slowing US economy worsens and sets off another sell-off for financial markets around the world.

The S&P 500 was down by 2.4% in midday trading and on track for its worst day since 2022. The Dow Jones Industrial Average was reeling by 864 points, or 2.2%, as of 11:40 am Eastern time, and the Nasdaq composite slid 2.7%.

The drops were just the latest in a global sell-off that began last week. Japan's Nikkei 225 helped start Monday by plunging 12.4% for its worst day since the Black Monday crash of 1987.

It was the first chance for traders in Tokyo to react to Friday's report showing US employers slowed their hiring last month by much more than economists expected. That was the latest piece of data on the US economy to come in weaker than expected, and it's all raised fear the Federal Reserve has pressed the brakes on the US economy by too much for too long through high interest rates in hopes of stifling inflation.

Professional investors cautioned that some technical factors could be amplifying the action in markets, but the losses were still neck-snapping. South Korea's Kospi index careened 8.8% lower, stock markets across Europe sank more than 2% and bitcoin dropped below $55,000 from more than $61,000 on Friday.

Even gold, which has a reputation for offering safety during tumultuous times, slipped 1%.

That's in part because traders began wondering if the damage has been so severe that the Federal Reserve will have to cut interest rates in an emergency meeting, before its next scheduled decision on Sept 18. The yield on the two-year Treasury, which closely tracks expectations for the Fed, briefly sank below 3.70% during the morning from 3.88% late Friday and from 5% in April. It later recovered and pulled back to 3.90%.

AP