Massive market sell-off sees hundreds of billions of pounds wiped from global stock markets

A MASSIVE market sell-off saw hundreds of billions of pounds wiped from global stock markets yesterday.

The turmoil was sparked by fears the US is heading for a recession as investors are going cool on tech giants’ hefty AI spending.

About £900billion was wiped off the world’s biggest technology giants including Amazon, Meta, Apple and Nvidia in a single day.

In another Black Monday, stock markets worldwide flashed red as the rout spread from Tokyo to Paris to London and New York.

London’s FTSE 100 suffered its worst drop in more than a year, wiping out all of its post-election feel-good gains.

It closed down by 166.48 points, or 2.04 per cent.

Neil Shearing, chief economist at Capital Economics, said: “So much for the summer lull.”

Panic began on Friday when weak job figures suggested the US economy was cooling rapidly.

Economists argued it was evidence the US central bank had kept interest rates too high for too long and strangled growth.

But some argued a cut now could spark more market panic.

Before US markets closed, some economists argued the sell-off was overblown, as the biggest tech losers started clawing back.

The market carnage is a tricky backdrop for Chancellor Rachel Reeves, who is visiting New York, trying to raise goodwill from Wall Street investors.