Japan’s Nikkei Index Surges 11% Following Major Sell-Off

Japan’s benchmark Nikkei 225 index surged nearly 11% on Tuesday, rebounding after a sharp decline the previous day. The index climbed over 3,300 points, recovering some of the more than 4,400 points lost on Monday, marking its worst single-day decline since 1987.

Monday’s market turmoil began with a global sell-off reminiscent of the 1987 crash, impacting Europe and Wall Street. The S&P 500 fell 3%, the Dow Jones Industrial Average dropped by 1,033 points, and the Nasdaq composite slid 3.4% as major tech companies like Apple and Nvidia faced significant declines.

The sell-off was triggered by a U.S. jobs report showing much slower hiring than expected, raising fears that the Federal Reserve’s high interest rates might have overcorrected the economy to curb inflation. These concerns led to significant market volatility, with South Korea’s Kospi index falling 8.8% and Bitcoin dropping below $54,000 from over $61,000 on Friday.

Despite fears of an economic slowdown, the U.S. economy continues to grow, and the stock market has seen overall gains this year. However, concerns about high interest rates and the impact on tech stocks, particularly those involved in the AI sector, have led to sharp declines. Apple fell 4.8% following news that Warren Buffett’s Berkshire Hathaway reduced its stake in the company, and Nvidia dropped 6.4% due to delays in its new AI chip.

Investor concerns also include geopolitical tensions, such as the ongoing Israel-Hamas conflict, and upcoming U.S. elections, which could further influence market stability. Despite these uncertainties, the focus remains on economic indicators like employment rates, which will be crucial leading up to election day.