Wall Street sell-off: London market plummets amid fears of US recession
It fell 79.66 points, a 0.92 per cent drop, closing at 8,600.22 on Monday.
This follows a week of global market instability as investors grappled with the implications of US tariffs on Canada, Mexico, and China.
President Donald Trump 's fluctuating policy decisions, including a temporary suspension of tariffs on Canada and Mexico on Thursday, further unsettled markets.
By the close of European markets, the S&P 500 had plummeted 2.3 per cent, while the Dow Jones Industrial Average had fallen 1.2 per cent.
Analysts suggest several factors may be contributing to this widespread sell-off.
David Morrison, a senior market analyst for Trade Nation, said there was uncertainty surrounding tariffs, adding: 'The president appears to be taking a scatter-gun approach in terms of targets, while teasing the markets with last-minute reprieves, delays or softening in scope.
'All-in-all, it's proving difficult to price all this in.'
He also said there are 'some concerns over the US economy', with Trump ducking questions about whether the country was facing a recession during an interview aired on Sunday, and instead saying it was a time of 'transition.'
Dan Coatsworth, investment analyst at AJ Bell, said: 'The US market sell-off is starting to look ugly.
'Many people have been worried about elevated valuations among US equities for some time and looking for the catalyst for a market correction.
'A combination of concerns about a trade war, geopolitical tensions and an uncertain economic outlook could be that catalyst.'
In Frankfurt, Germany's Dax index suffered another sharp decline on Monday, closing 1.69 per cent lower. In Paris, the Cac 40 fell 0.9 per cent.
The pound was weakening against key currencies, falling about 0.3 per cent against the US dollar, at 1.289, and down about 0.2 per cent against the euro, at 1.19.
The price of Brent crude oil was down around 1.2 per cent to 69.60 US dollars per barrel.
Shares in shipping broker Clarksons dived by a fifth after the company warned over the impact of geopolitical uncertainties, including trade tensions, tariffs, and ongoing global conflict.
Clarksons said this was causing rates charged by shipping companies to fall over the start of the year, which has brought down the value of deals. Its shares closed 21.7 per cent lower.
Meanwhile, shares in building materials firm Travis Perkins dropped 8.4 per cent after it announced CEO Pete Redfern was leaving due to health issues.
The biggest risers on the FTSE 100 were Kingfisher, up 9.5p to 268.6p, Whitbread, up 84p to 2,598p, Severn Trent, up 68p to 2,461p, National Grid, up 25.8p to 955.6p, and Land Securities, up 15p to 564p.
The biggest fallers on the FTSE 100 were Entain, down 62.4p to 661.2p, Rolls-Royce, down 68.6p to 732.8p, Intermediate Capital, down 124p to 2,004p, Anglo American, down 124p to 2,257.5p, and Barclays, down 14.2p to 284.55p.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
an hour ago
- Daily Mail
The shares that rocketed over the past decade - but which markets delivered most 'ten-baggers'?
The FTSE 100 has hit a series of record highs, surpassing 9,000 points for the first time in July, and then breaking through 9,100. Despite a slip-up at the end of last week, the FTSE 100 still closed at 9,067. Already, bulls will be setting their targets on the 10,000-point mark in the years to come. The FTSE 100 has grown by more than 10 per cent this year so far, while the FTSE 250 is up almost 7 per cent. The standout big name performer this year has been Rolls-Royce, with the engineer's shares up 78 per cent since the start of 2025 - and an astonishing 1,100 per cent over the past five years. Yet for investors looking strike it rich on a true gold mine stock over the long term, the UK might not be the place to look. Analysis from IG, shared exclusively with This is Money, suggests that investors hoping to find a 'ten-bagger' stock should be looking across the pond - where they are 22 times more likely to find a higher performer than in the UK. A ten-bagger is a stock that multiplies its value tenfold over a ten-year period, delivering a 1,000 per cent or higher gain. While Rolls-Royce has ten-bagged from its lows, just a single main market UK stock proved to be a ten-bagger over the decade-long period that IG looked at: Warhammer maker, Games Workshop. The firm returned 3,109 per cent during the period, according to IG analysis covering the S&P 500, Europe's Stoxx 600 and the UK's FTSE 350 over the ten years from the end of June 2015 to the end of June 2025, based on share price gains alone. The Nottingham-based firm, which only joined the ranks of the FTSE 100 in December last year, is something of an unlikely British success story. In June 2015, Games Workshop shares were worth around 500 pence each, having languished under the £10 market since the 1990s, before booming in the past decade. Games Workshop's impressive return places it as the ninth highest growing ten-bagger in the list. > How Games Workshop transformed into a miniature wargames giant Top 10 ten-bagger stocks, 2015-2025 Rank Company 10-year share price growth Geography 1 Nvidia Corp. 29,959% US 2 Advanced Micro Devices 5,524% US 3 Argenx SE 4,535% Europe 4 Rheinmetall AG 3,585% Europe 5 Evolution AB 3,167% Europe 6 Games Workshop Group PLC 3,109% Europe 7 Axon Enterprise Inc 2,237% US 8 Texas Pacific Land Corp 2,077% US 9 Fair Isaac Corp 1,913% US 10 Arista Networks 1,834% US Source: IG, data is across the FTSE 350, S&P 500 and Stoxx 600 How the US became the home of ten-baggers However, its growth still pales in comparison with US darling Nvidia, with the chipmaker and largest company in the world rising an eye-watering 29,959 per cent since 2015. The S&P 500 had 23 ten-baggers in total, including Advanced Micro Devices, rising 5,254 per cent, and Axon Enterprise, which increased 2,237 per cent. Other big US names like Tesla and Netflix also made it into the list. Chris Beauchamp, chief market analyst at IG, said: 'Every investor dreams of finding the next Apple or Nvidia - stocks that transform portfolios with tenfold returns. But those headline-grabbing success stories are far more common in the US than in the UK. 'While American markets boast the world's biggest tech giants, the FTSE 100 is still dominated by more traditional names which don't always fire the imagination in the same way.' Even mainland Europe far outweighs the UK, with 14 of the Stoxx 600 delivering tenfold returns over the decade. Dutch biotech firm Argenx SE grew 4,535 per cent over the period, while German defence frim Rheinmetall AG has risen 3,585 per cent since 2015. IG said Europe's ten-baggers are noticeably more diversified than the US' tech-heavy winners, although still mainly focused around tech and healthcare. Of course, IG's analysis only includes 350 UK stocks, compared to 600 for Europe and 500 for the US. Still, the UK's lag on high growth stocks comes amid continued concerns that London is no longer a competitive market, and fewer companies are choosing to bet on going public in the UK. This year so far, some 70 companies have left the UK market, while over recent years big names have fled the UK, with the likes of chipmaker Arm and gambling firm Flutter betting on the US, while most recently UK fintech Wise has said it plans to move its listing to New York. Beauchamp added: 'To change that, the UK needs to do more to attract and retain high-growth companies, particularly in tech and innovation. 'That means making London a more appealing place to list - and encouraging a shift in corporate culture, with more focus on long-term reinvestment and growth rather than just delivering dividends.'
Reuters
2 hours ago
- Reuters
Shares get a lift in Asia as lower US rates are baked in
SYDNEY, Aug 4 (Reuters) - Share markets found some much needed support in Asia on Monday as the heightened prospect of lower borrowing costs helped soothe concerns about the U.S. economy, though the long-term credibility of U.S. policy remained in doubt. A buy-the-dip mentality led to a bounce in Wall Street and European stock futures, and allowed the dollar to stabilise after Friday's U.S. payrolls-induced retreat. Treasuries ran into some profit-taking after their huge gains, but fund futures still imply an 85% chance the Federal Reserve will cut rates in September and ease by 100 basis points or more by this time next year. The prospect of a shift in rates was the only silver lining to a dire payrolls report in which downward revisions left the three-month average of jobs growth at 35,000 from 231,000 at the start of the year. "The report brings payroll growth closer in line with big data indicators of job gains and the broader growth dataset, both of which have slowed significantly in recent months," said analysts at Goldman Sachs. "Taken together, the economic data confirm our view that the U.S. economy is growing at a below-potential pace." Neither did the reaction of President Donald Trump instil confidence, as the firing of the head of Labor Statistics threatened the credibility of U.S. economic data. Likewise, news that Trump would get to fill a governorship position at the Federal Reserve early added to worries about the politicisation of interest rate policy. Analysts assume the appointee will be loyal to Trump alone, though the president did grudgingly concede that Fed Chair Jerome Powell would probably see out his term. "It opens the prospect of broader support on the Fed Board for lower rates sooner rather than later," said Ray Attrill, head of FX research at NAB. "Fed credibility, and the veracity of the statistics on which they base their policy decisions, are both now under the spotlight." Markets have essentially already eased for the Fed, with two-year Treasury yields down almost 25 basis points on Friday in the biggest one-day drop since August last year. The drop in global yields seemed to help equities, with S&P 500 futures and Nasdaq futures both bouncing 0.4%. EUROSTOXX 50 futures gained 0.6%, while FTSE futures rose 0.5% and DAX futures 0.4%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab firmed 0.7%, aided by a 1.1% rally in South Korean (.KS11), opens new tab stocks. Japan's Nikkei (.N22%), opens new tab fell 1.4%, in part weighed by Friday's rebound in the yen, while Chinese blue chips were flat. Wall Street has taken comfort in an upbeat results season. About two-thirds of S&P 500 companies have reported, and 63% have beaten forecasts. Earnings growth is estimated at 9.8%, up from 5.8% at the start of July. Companies reporting this week include Disney (DIS.N), opens new tab, McDonald's (MCD.N), opens new tab, Caterpillar (CAT.N), opens new tab and some of the large pharmaceutical groups. The dismal U.S. jobs data did put a dent in the dollar's crown of exceptionalism, snuffing out what had been a promising rally for the currency. The dollar was a shade firmer at 147.79 yen , having shed an eye-watering 2.3% on Friday, while the euro held at $1.1574 after bouncing 1.5% on Friday. The dollar index was pinned at 98.801 , having tumbled from last week's top of 100.250. Sterling was restrained at $1.3281 as markets are 87% priced for the Bank of England to cut rates by a quarter point at a meeting on Thursday. The BoE board is expected to remain split on easing, while markets still favour two further cuts by the middle of next year. In commodity markets, gold was little changed at $3,357 an ounce , having climbed more than 2% on Friday. Oil prices extended their latest slide as OPEC+ agreed to another large rise in output for September, which completely reverses last year's cuts of 2.2 million barrels per day. Brent futures dropped 0.2% to $69.52 a barrel, while U.S. crude futures fell 0.1% to $67.24 per barrel.
Reuters
2 hours ago
- Reuters
Dollar finds footing after US jobs drubbing
SINGAPORE, Aug 4 (Reuters) - A battered dollar found some support on Monday after a dismal U.S. jobs report and President Donald Trump's firing of a top labour official stunned investors and led them to ramp up bets of imminent Federal Reserve rate cuts. Data on Friday showed U.S. employment growth undershot expectations in July while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labour market conditions. Adding to headwinds for markets, Trump fired Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer the same day, accusing her of faking the jobs numbers. An unexpected resignation by Fed Governor Adriana Kugler also opened the door for Trump to make an imprint on the central bank much earlier than anticipated. Trump has been at loggerheads with the Fed for not lowering interest rates sooner. The barrage of developments dealt a one-two punch to the dollar, which sank more than 2% against the yen and roughly 1.5% against the euro on Friday. The greenback recovered some of its losses against the Japanese currency on Monday, last trading 0.2% higher at 147.67 yen . Still, it was down about 3 yen from its peak on Friday. The euro fell 0.06% to $1.1579 , while sterling was little changed at $1.3281. Trump said on Sunday he will announce a candidate to fill an open position at the Fed and a new BLS head in the next few days. Against a basket of currencies, the dollar edged up 0.1% to 98.75, after sliding more than 1% on Friday. "Market reactions to Friday night's events were swift and decisive," said Tony Sycamore, a market analyst at IG. "Equities and the U.S. dollar tumbled, along with yields." The two-year Treasury yield fell to a three-month low of 3.6590% on Monday as traders heavily scaled up bets of a Fed cut in September, while the benchmark 10-year yield strayed not too far from a one-month low at 4.2493%. Markets are now pricing in a more than 90% chance the Fed will ease rates next month owing to the weaker-than-expected jobs data, with just under 60 basis points worth of cuts expected by December. "We pull forward our baseline call for a 25 bps cut from the FOMC to September," said David Doyle, head of economics at Macquarie Group. "While we don't see significant further weakness in the labour market, the results of this report are likely to shift the FOMC's assessment of the balance of risks to the outlook." In other currencies, the Australian dollar rose 0.09% to $0.64815, after rising 0.8% on Friday against a weaker greenback. The New Zealand dollar eased 0.11% to $0.59125. The Swiss franc weakened more than 0.1% to 0.8054 per dollar. Switzerland was left stunned on Friday after Trump hit the country with one of the highest tariffs in his global trade reset, with industry associations warning of tens of thousands of jobs being put at risk.
