U.S. stocks plunge as recession fears jolt global markets

(Reuters) -- Wall Street's main indexes slumped on Monday as fears of the United States tipping into recession following weak economic data last week rippled through global markets.

Bourses from Asia to Europe took a beating and bond yields slipped as investors rushed to safe-haven assets and bet the U.S. Federal Reserve would now need to cut interest rates aggressively to spur growth.

The sell-off was brutal, with the so-called Magnificent Seven group of stocks -- the main driver for the indexes hitting record highs earlier this year -- set to lose a combined $1 trillion in market value.

Apple fell 4.6% after Berkshire Hathaway halved its stake in the iPhone maker, suggesting that billionaire investor Warren Buffett is growing wary about the broader U.S. economy or stock market valuations that have gotten too high.

Nvidia slid 5.6% after reports of a delay in the launch of its upcoming artificial intelligence chips due to design flaws. Microsoft and Alphabet fell about 3% each.

At 10:04 a.m. the Dow Jones Industrial Average had fallen 860.39 points, or 2.18%, to 38,870.14, the S&P 500 lost 133.97 points, or 2.51%, to 5,212.59 and the Nasdaq Composite lost 520.61 points, or 3.10%, to 16,255.55.

A weak jobs report and shrinking manufacturing activity in the world's largest economy, coupled with dismal forecasts from the big U.S. technology firms, pushed the Nasdaq 100 and the Nasdaq Composite into a correction last week.

The disappointing jobs data also triggered what is known as the "Sahm Rule," seen by many as a historically accurate recession indicator.

Traders now see an 88% probability that the U.S. central bank will cut benchmark rates by 50 basis points in September, compared with an 11% chance seen last week, according to