In the US, all three major indices ended lower, with the Nasdaq Composite suffering the most, dropping 2.3%. Initially, US equities had opened higher after Federal Reserve Chair Jerome Powell hinted at a possible interest rate cut in September, the first in four years. However, markets fell after the July manufacturing index, at 46.8%, failed to meet analyst expectations.

Peter Cardillo of Spartan Capital attributed the market decline to concerns over an economic slowdown and noted that jobless claims had exceeded estimates. "The market might be beginning to fear that the economy is slowing to the point where we might be looking at a recession eight to 12 months from now," he said.

US markets now await the monthly jobs data, a key economic indicator, on Friday.

In the UK, the Bank of England cut its main interest rate for the first time since the pandemic, lowering borrowing costs to 5%. While this move stabilized the pound, it did not prevent a decline in London stocks. European markets are uncertain about whether the European Central Bank will cut interest rates in September following a similar move in June, amid shifting inflation data. Both Frankfurt and Paris indices closed over 2% in the red.

In Asia, Tokyo led the losses with the Nikkei 225 slumping over 5% at one point due to a stronger yen, impacting Japan's key export sector. Hong Kong, Sydney, Seoul, and Taipei each fell over 2%, while Shanghai, Jakarta, Wellington, Singapore, and Manila also recorded losses.

Meanwhile, oil prices retreated after a previous rally, as analysts believe rising Middle East tensions are unlikely to significantly impact the crude market.

In the US, all three major indices ended lower, with the Nasdaq Composite suffering the most, dropping 2.3%. Initially, US equities had opened higher after Federal Reserve Chair Jerome Powell hinted at a possible interest rate cut in September, the first in four years. However, markets fell after the July manufacturing index, at 46.8%, failed to meet analyst expectations.

Peter Cardillo of Spartan Capital attributed the market decline to concerns over an economic slowdown and noted that jobless claims had exceeded estimates. "The market might be beginning to fear that the economy is slowing to the point where we might be looking at a recession eight to 12 months from now," he said.

US markets now await the monthly jobs data, a key economic indicator, on Friday.

In the UK, the Bank of England cut its main interest rate for the first time since the pandemic, lowering borrowing costs to 5%. While this move stabilized the pound, it did not prevent a decline in London stocks. European markets are uncertain about whether the European Central Bank will cut interest rates in September following a similar move in June, amid shifting inflation data. Both Frankfurt and Paris indices closed over 2% in the red.

In Asia, Tokyo led the losses with the Nikkei 225 slumping over 5% at one point due to a stronger yen, impacting Japan's key export sector. Hong Kong, Sydney, Seoul, and Taipei each fell over 2%, while Shanghai, Jakarta, Wellington, Singapore, and Manila also recorded losses.

Meanwhile, oil prices retreated after a previous rally, as analysts believe rising Middle East tensions are unlikely to significantly impact the crude market.