Fears of a recession are rapidly growing amid a dramatic plunge in the stock market on Monday.
The Dow Jones plunged nearly 1,000 points as a global market sell-off spread to Asia and Europe.
Japan’s Nikkei index had its worst day since “Black Monday” in October 1987.
The concerns come as investors worry about the unemployment rate after a lackluster jobs report was released on Friday. There are also concerns that the Federal Reserve has been too slow to cut interest rates.
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Chad Nesmith, a financial analyst at Tobias Financial, said he’s fielded a number of calls from clients as news of the stock market spread.
“It’s kind of given the market something to worry about when we haven’t had something to worry about in a long time,” Nesmith said.
Even with chatter of an impending war in the Middle East and questions over the volatility of Big Tech, Nesmith is suggesting that investors don’t panic.
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“Most of it is just noise right now,” Nesmith said. “Technology – it works really well on the upside. It carried us last year and this is just a small hiccup they’re having. When expectations for these stocks are so high, all it takes is small changes in those expectations to have big impacts on prices.”
Even if those recession fears come to fruition, Nesmith is confident it won’t look like the 2008 or COVID recessions.
Financial analysts suggest taking advantage of this market correction when stock prices are lower.
“It opens up opportunity to purchase things when they’re lower and do what’s called tax lost harvesting; that is to lock in some tax losses to offset in your gains,” Nesmith said.
As of Monday evening, trading at many companies were already rebounding from the morning plunge.
