In a third consecutive day of intense volatility, the U.S. stock market tumbled, with the Dow Jones Industrial Average experiencing a substantial drop of more than 1,000 points. Lingering concerns over an economic slowdown, triggered by a decline in hiring rates and weakening consumer spending, have sparked this ongoing market turbulence.

On Monday, the S&P 500 index slid by 160 points, marking a 3% decrease, while the tech-heavy Nasdaq Composite sank by 3.4%. Investors are abandoning prominent Big Tech names that had previously driven the market upward, as Apple witnessed a 4.8% decrease, Meta fell by approximately 2.5%, and chipmaker Nvidia experienced a significant tumble of 6.4%.

The Dow Jones Industrial Average suffered a 2.6% loss, shedding 1,034 points. Earlier in the day, the market had plunged by more than 1,200 points, but it regained some ground as investors digested the Institute for Supply Management (ISM) Services index data, which showed an uptick in service employment in July.

According to Oxford Economics, the details from the ISM report were encouraging, with significant rebounds in business activity, new orders, and employment. The report reflects an economy going through a transition rather than one on the verge of collapse.

The downward trend in stocks began last Thursday following disappointing reports on manufacturing and construction, fueling concerns of a potential buckle under the weight of high interest rates. Friday's release of government data, which showed weaker-than-expected hiring in July, further intensified Wall Street's apprehensions about a possible "soft landing" transforming into a more severe economic downturn.

Paul Christopher, the Head of Global Investment Strategy at Wells Fargo, emphasized that the economy's slowdown is the primary ongoing factor. While household financial stress has been accumulating for the past two years, job growth has remained above average. However, the recent jobs report revealed that employers added only 114,000 new jobs in July, far below economists' expectations of 175,000.

In recent weeks, tech stocks, particularly those related to artificial intelligence, have taken a significant hit as investors retreat amidst uncertainties surrounding when this emerging sector will begin delivering profits. Market analysts noted skepticism about the pace of AI investments, raising doubts about the sector's viability.

The U.S. market rout has had a ripple effect, impacting Asian and European markets as well. Japan's benchmark stock index, the Nikkei, plummeted by 12.4% on Monday, following a 5.8% drop on Friday, marking the worst two-day decline in its history. Similarly, stocks in Korea and Taiwan also experienced sharp declines, as investors pulled back from AI-focused companies due to concerns of overhype in the sector.

European markets opened lower on Monday, with Germany's DAX down 2.3%, France's CAC 40 losing 1.9%, and the UK's FTSE 100 down 2.1%.

Despite the recent market plunge, U.S. stocks still remain in positive territory for the year. The S&P 500 has seen a 9.4% increase, even after accounting for the recent decline, while the Dow Jones Industrial Average remains up by 2.6%.

The disappointing economic data has fueled worries that the Federal Reserve may have maintained its benchmark interest rate too high for too long, heightening the risk of a recession. Calls for the Fed to commence rate cuts sooner rather than later have emerged, in an effort to prevent an economic downturn.

Nigel Green, CEO of deVere Group, an independent financial advisory and asset management firm, emphasized the need for the Federal Reserve to ease monetary policy more aggressively to avoid a recession. Green highlighted that the Fed cannot afford to lag behind, as it did during the last economic cycle.

Despite the global concerns surrounding the U.S. economic weakness and volatile markets, domestic economic activity remains solid. While experts acknowledge the possibility of a sharper downturn, many forecast a soft landing rather than a recession. The second-quarter gross domestic product (GDP) showed an acceleration to 2.8%, surpassing expectations, and experts remind investors that a recession is typically marked by two consecutive quarters of negative GDP.

Analysts also caution against overinterpreting the July jobs report, as it represents just one month of data. They note that the figures may have been impacted by Hurricane Beryl, with a significantly higher number of people reporting inability to work due to weather conditions.

Solita Marcelli, the Chief Investment Officer Americas at UBS Global Wealth Management, advises investors not to place excessive emphasis on a single data release. Marcelli points out that the number of people unable to work due to weather in July was significantly higher than average, further underlining the potential distortion caused by the hurricane.

While uncertainties persist, the market remains watchful of economic signals, awaiting potential actions by the Federal Reserve and further developments on the global economic front.