United States stock index futures experienced a significant decline on Monday, particularly those associated with the Nasdaq, which witnessed a drop of nearly 5%. This downturn was primarily driven by concerns that the United States may be entering a recession, following the release of weak economic data last week.

The impact of these concerns was felt across global markets, resulting in a negative performance of stock exchanges from Asia to Europe.

Additionally, bond yields decreased as investors sought refuge in safer assets, anticipating that the United States Federal Reserve might need to swiftly reduce interest rates to stimulate economic growth.

Notably, all megacap and growth stocks, which were the primary contributors to the record highs achieved by the indexes earlier this year, experienced a steep decline in premarket trading.

Among these stocks, Apple’s performance was particularly noteworthy, with an 8.4% drop. This decline was influenced by Berkshire Hathaway’s decision to significantly reduce its stake in the iPhone manufacturer by almost 50%.

This action suggests that renowned investor Warren Buffett harbors concerns regarding the broader United States economy or the elevated valuations of the stock market.

Nvidia experienced a 9.7% decline due to reports indicating a delay in the launch of its upcoming artificial intelligence chips attributed to design flaws. Microsoft encountered a 4.7% decrease, and Alphabet faced a 6% decline.

At 06:45 a.m. ET, Dow E-minis exhibited a 1.94% decrease, equivalent to 775 points. S&P 500 E-minis experienced a 2.99% decline, corresponding to 160.75 points. Nasdaq 100 E-minis witnessed a significant 4.65% decrease, equivalent to 862 points.

The Nasdaq 100 and the Nasdaq Composite entered a correction last week due to a weak jobs report and shrinking manufacturing activity in the world's largest economy, along with gloomy forecasts from major U.S. technology companies.

The disappointing jobs data also triggered the "Sahm Rule", considered a reliable recession indicator. Traders are now anticipating a 98.5% likelihood of a 50 basis points rate cut by the U.S. central bank in September, a significant increase from the 11% chance seen the previous week according to CME's FedWatch Tool.

Major Wall Street firms have adjusted their Fed rate projections for 2024 to reflect more substantial policy easing by the central bank.

Despite initial skepticism, Ronald Temple, chief market strategist at Lazard, stated that if the upcoming data aligns with the current trend, the Fed may need to take aggressive action. Yields on U.S. government bonds dropped to multi-month lows, with the 10-year note at 3.7379% and the two-year at 3.7561%.

The CBOE Volatility index, known as the "fear gauge", surpassed its long-term average level of 20 points and was currently at 53.11, the highest since April 2020. Several Fed officials are scheduled to discuss the economy and monetary policy, potentially providing insight into interest rate cuts.

Chicago Fed President Austan Goolsbee and San Francisco Fed President Mary Daly are among those expected to speak. Futures tracking the small-cap index Russell 2000 declined by 4.9%.

Stocks linked to cryptocurrencies experienced losses following Bitcoin's five-month low. Coinbase Global dropped by 13%, while MicroStrategy and Riot Platforms fell by 15.8% and 12.2%, respectively.

Major U.S. banks also saw declines, with Bank of America leading the losses with a 4.5% decrease.