World stocks recover after Monday’s turmoil

After their worst day in two years, the Dow and S&P 500 opened positively today, rising 0.11% and 0.43% respectively after their first action. Meanwhile, the tech-heavy Nasdaq rose 0.25%.

But global markets calmed down on Tuesday in a “trend reversal,” according to analysts at Deutsche Bank.

In Tokyo, the benchmark Nikkei 225 index rose 10.23% to 34,675.46, while the broader Topix index gained 9.30% to 2,434.21.

The Nikkei index plunged more than 12%, or 4,451.28 points, the day before, its biggest drop in history.

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In Europe, the major European stock markets also opened positively the day after closing in the red, with Frankfurt up 0.77%, London up 0.47%, Amsterdam up 0.76% and Paris up 0.10%.

At the currency level, the yen fell 1.09% against the dollar to 145.78 yen per dollar after surging on Monday, and fell 0.98% against the euro to 159.46 yen per euro.

Data released last week showed that the U.S. economy added 114,000 jobs last month, a month-on-month decrease and lower than expected, while the unemployment rate rose to 4.3%, the highest level since October 2021.

Analysts said the data left investors with the impression that the Federal Reserve had taken too long to cut interest rates and could trigger a recession.

On Monday, August 5, stock indices of the world’s major financial centers fell, starting with a stunning drop in Tokyo. In New York, Wall Street collapsed, with the Dow Jones falling 2.60% to 38,703.27 points, marking its worst day so far in 2022.

The main trigger for the collapse was last week’s release of the U.S. unemployment rate, which rose more than expected to 4.3% in July.