It turned out to be a gloomy Friday for global stock markets due to rising fears of a possible US recession. Japan’s main stock index, the Nikkei 225, was down 5.8 percent after a disappointing update from Intel sparked selling in technology shares across the board.

Intel Fears and Effect on the Stock Market

Intel shares plunged as much as 27% in the first minutes of trading on Wall Street. Intel has had a very horrid year; the stock, since January, is down over 50%. That slide now threatens to hit its lowest level in at least a decade.

Intel recently announced plans to cut its workforce by 15,000 jobs. It is part of an effort to refocus the company and slash non-essential projects. Other chipmakers also felt the impact of Intel’s news: shares in Nvidia dropped around 4 percent, with a similar fall of 7 percent for UK-based Arm.

Broader Tech Sector Troubles

Tech stocks broadly were not having a good day. Social media companies also sold off broadly. Snap’s shares dropped over 20% off of its weak earnings outlook. Pinterest’s were down 5%, while Meta — the parent company of Facebook — saw its stock fall 0.67%.

Big US Stock Indexes Decline

The major U.S. stock indexes opened significantly in the red. The S&P 500 dropped 70.1 points to 5,376.63, while the Nasdaq shed 413.7 points to 16,780.446. Investors obviously had more cause to be seriously annoyed about how firms like Intel spent their capital. “The $63 billion that Intel has spent on share buybacks over the last decade could arguably have been better used to establish a more competitive foothold,” AJ Bell investment director Russ Mould said.

Weak US Jobs Data

The Labor Department’s report showed that the overall nonfarm payrolls increased by 114,000 jobs in July, well below the expected figure of 175,000 jobs. The unemployment rate popped up to 4.3%. According to Ronald Temple, Chief Market Strategist at Lazard, this weak jobs data may provoke the Federal Reserve into cutting interest rates more aggressively. He warned the Fed cannot make the mistake of being too slow to recognize problems in the economy, as it did in the case of inflation.

Corporate Earnings and Market Reactions

“Today’s poor employment data came at a very sensitive time for the markets,” said Neil Birrell, investment chief at Premier Miton Investors. With concerns over Federal Reserve policies, corporate earnings in focus, and a poor jobs report, all would be added to the angst about the economy’s health. He emphasized that what it all means is that now the markets will have to adjust to the real weakening of the economy.

Vodafone-Three Merger Delayed

In other news, the Vodafone-Three merger has reached an impasse. The said merger was expected to bring into being an entity more viable and competitive in the marketplace of the telecom industry. Regulatory issues cropped up, which really upset the balance, and now the future with this merger remains vague.

IAG Announces First Post-Pandemic Dividend

On the bright side, International Airlines Group, the parent company of British Airways, announced its first dividend since the beginning of the pandemic, which brought some solace into an otherwise doleful market. Following the declaration, IAG shares went up, underpinning investor faith in the recovery as it sailed past the most turbulent period in its history.

Virgin Money’s Takeover by Nationwide

Virgin Money said it had already spent £10m on fees as part of its takeover by Nationwide. The total bill for City advisory fees will be around £80m, to be split between Virgin Money and Nationwide. The deal, however, remains on course to be completed by the end of the year, in spite of the huge costs involved in the £2.9 billion acquisition.