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(Bloomberg) — Asian markets are poised for losses on Monday as fears of a deeper US economic slowdown roil traders around the globe worried that the Federal Reserve may be behind the curve on rate cuts. Oil climbed on rising tensions in the Middle East. Most Read from Bloomberg The S&P 500 saw its worst reaction to jobs data in almost two years, dropping 1.8%. Intel Corp. plunged 26% on a grim growth forecast, adding to a string of poor tech earnings that have sent the Nasdaq 100 down over 10% from its peak to enter a correction. A worsening conflict in the Middle East risks adding more tumult to markets as investors brace for a turbulent second half of the year. A gauge of bond market volatility has climbed, while the VIX Index – Wall Street’s fear gauge – jumped to the highest in almost 18 months after a weak US jobs report ratcheted fears of a recession, as focus increases on an already chaotic US election race.
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US futures dropped in early trading, amid the fallout from heavy losses on Wall Street on Friday and Berkshire Hathaway Inc.’s weekend disclosure that it slashed its stake in Apple Inc. by almost half during the second quarter. Contracts indicate that Australian, Japanese and Hong Kong shares are set to drop on Monday. Berkshire’s selling is “going to be immediately seen as a negative,” said Mark Lehmann, chief executive officer at Citizens JMP Securities. “Apple is the number one player in the global consumer space and that’s the statement about the global consumer.” Oil rose in early Monday trading after Saudi Arabia lifted the price of crude it sells to Asia and amid reports Iran may strike Israel to avenge assassinations of Hezbollah and Hamas officials. Saudi Arabian and Israeli stocks slumped more than 2% on Sunday, outpacing Friday’s losses on Wall Street. Japanese shares have plunged in the last two sessions on expectations for more domestic interest rate hikes. The broader Topix index sank more than 6% on Friday, marking its worst day since 2016. The yen has continued its gains, hitting 145.78 against the dollar on Monday, its strongest since January. Data on Friday showed that US nonfarm payrolls rose by 114,000 in July — one of the weakest prints since the pandemic — and job growth was revised lower in the prior two months. The jobless rate unexpectedly climbed for a fourth month to 4.3%, above the Federal Reserve’s year-end forecast, triggering a closely watched recession indicator.