📉 Your analysis is comprehensive and based on a logical narrative of the intertwined factors that led to the recent collapse in global markets. To enhance the accuracy of the picture, here are the key points derived from the latest news reports:
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🔍 What actually happened?
- On August 1, 2025, President Trump announced new tariffs ranging from 10% to 41% on imports from 68 countries and the European Union, leading to a sharp decline in markets.
- The July jobs report revealed only 73,000 jobs added, far below expectations, with massive downward revisions to May and June data.
- The VIX index rose significantly, and bond yields fell, reflecting a shift by investors towards safe assets.
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📊 Immediate results:
Index Change Reason S&P 500 -1.6% Tariffs + Weak job data Nasdaq -2.24% Decline of major tech companies Dow Jones -1.23% Recession fears VIX ↑ Increased volatility Bond yields ↓ 4.22% Shift towards safety ---
⚠️ Structural factors that deepened the crisis:
- The high leverage has led to forced liquidations in derivatives and futures.
- High stock valuations, especially in the AI sector, have made the market vulnerable to any shocks.
- The potential recession has become more realistic, with forecasts from JPMorgan and OECD predicting global growth to drop to just 2.3% in 2025.
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📉 Are we at the beginning of a recession?
- According to [Financial Express], more than $1.1 trillion in market value was wiped out in a day described as an "economic perfect storm, combining trade shocks, weak labor market, and declining confidence.
- The Federal Reserve may be forced to cut interest rates in September, with expectations reaching 87.5% for a cut.
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🧠 Summary:
The collapse was not just an emotional reaction but the result of a complex interaction between sudden trade policies, weak economic data, and structural risks in the markets. What is happening now is a real test of the global financial system's ability to absorb multiple shocks at once.