A surprising jobs report released last week paired with a volatile Japanese market led to a massive selloff during Monday’s trading day, with both the Dow Jones and the S&P seeing their worst sessions since 2022.

After a wild week in the markets that rekindled fears about the strength of the U.S. economy, investors are wondering what comes next.

Until recently, Wall Street was focused squarely on inflation, hoping that its slowdown would lead the Federal Reserve to cut interest rates, giving support to stocks. The recent havoc has added an additional consideration: the risk that markets could tank in response to signs that the economy was slowing too fast.

Airbnb shares dropped 14% in after-hours trading after the company reported second-quarter earnings that missed analyst expectations and warned that it’s seeing signs of slowing demand from U.S. customers.

Here’s how the company did compared to LSEG estimates for the quarter ended June 30:

Earnings per share: 86 cents vs. 92 cents expected

Revenue: $2.75 billion vs. $2.74 billion expected

Wall Street's main indexes rose in volatile trading on Tuesday, as investors looked for bargains after a rout in the previous session, while dovish rate commentary from Federal Reserve officials also lifted the mood.

Most megacap and growth stocks, which together lost $200 billion in market value on Monday, gained as Nvidia (NVDA.O), opens new tab bounced back 2.3%.

Stocks jumped Tuesday, recovering some some losses from the previous trading session.

The S&P 500 traded 1% higher. The Dow Jones Industrial Average rose 316 points, or 0.8%, and the tech-heavy Nasdaq Composite gained 0.8%.

Several big technology stocks rebounded after a sharp pullback on Monday. Nvidia rose 3.6%, while Meta Platforms advanced 2.5%. Meanwhile, Apple continued its decline and fell more than 2%.

Japan’s stocks rebounded sharply on Tuesday after the Nikkei 225 and the Topix dropped over 12% in the previous session. Other Asia-Pacific markets were mostly higher.

The Nikkei 225 — which saw its largest loss in the previous session since the 1987 Black Monday crash — as well as the broad-based Topix gained over 9%.

The Nikkei ended the day up 10.23% at 34,675.46, hitting its largest daily gain since October 2008 and highest ever spike in terms of index points. The Topix finished up 9.3% at 2,434.21.

Markets cratered around the world Monday. Japan’s Nikkei fell more than ever — down 12.4% while “benchmark indexes in South Korea and Taiwan were both down more than 8%,” noted the Wall Street Journal. The S&P 500 opened down “about 4% Monday, with the Nasdaq falling a larger 6%,” the Journal reported.

Unless you are feeling adventurous — in which case now could be a good time to buy companies on your shopping list at a lower price — just hold on.

A global market meltdown continued Monday as the Dow Jones Industrial Average dropped by 1,000 points before recovering slightly on fears the U.S. economy was weakening and a series of other concerns combined to throw investors worldwide into a panic.

What Happened?

It's OK to calm down about the economy. Yes, Friday's unemployment news was bad. Yes, the NASDAQ and Dow Jones neared correction territory on Friday morning. And yes, the Sahm Rule Recession Indicator has now been triggered. Odds are, though, a recession is not imminent. 

Japan’s Nikkei Stock Average had its worst day since 1987, falling 12.4% in a frenzy of selling triggered by disappointing economic data in the U.S. and a surge in the Japanese yen. 

Other Asian markets also fell, with benchmark indexes in South Korea and Taiwan both down more than 8%. S&P 500 futures fell by more than 2% in Asia as U.S. markets prepared to open the week.