The numbers that appeared on trading screens on Monday were shocking even to experienced investors.
In Tokyo, the Nikkei fell 12 percent. In Seoul, the Kospi fell 9 percent. And as the opening bell rang in New York, the Nasdaq fell 6 percent in seconds. Cryptocurrencies fell; the VIX, a gauge of stock market volatility, soared; and investors rushed to government bonds, the safest assets of all.
Whether Monday’s wild swings mark the final blow of a global selloff that began last week or the beginning of a prolonged slump is impossible to say. But one thing is clear: The pillars that have supported financial-market gains for years — a set of key assumptions that investors around the world have relied on — have been shaken. In retrospect, they seem a little naïve: The U.S. economy is unstoppable; artificial intelligence will soon revolutionize business everywhere; Japan will never raise interest rates — or not enough to matter.
