3 drivers behind Monday's market downturn

US stock markets (^DJI, ^IXIC,^GSPC) are falling as recession fears grip investors, triggering a widespread sell-off. Yahoo Finance Executive Editor Brian Sozzi examines three key factors potentially driving the downturn including the Federal Reserve's delay in implementing rate cuts, Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) reducing its positions in tech stocks, and a lack of return on investment (ROI) from Big Tech's AI ventures.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Angel Smith

Video Transcript

Yeah, there's a lot of information coming at investors right now, so we're doing our best here.

Yah Finances is still into things that are easily understandable.

And you can put in context and track throughout the session.

And what ultimately could be a very volatile week.

Uh, in markets really three reasons.

Stocks are getting pounded here.

Number one perception that the Fed has missed the boat dot, dot dot again that jobs report.

A lot of folks I'm talking on the street right now.

Uh, that jobs report on Friday really badly missed consensus forecasts.

And now there's this view, at least for today.

That is, of course, market narratives change.

Uh, literally.

Second by second.

There's a concern that the Fed should have started cutting rates already if growth is going to slow down.

So something to watch there as well.

That's the narrative, at least today amongst a lot of folks I'm talking to in the street.

Number two.

When Warren Buffett dumped stocks, bears grow.

Uh, we got that news over the weekend that Warren Buffett continued to sell shares of Apple Lightning is a load on stocks, and more generally are there are really a legion of followers of Warren Buffett's various investing disciplines out there in the world of markets.

So when you see Warren Buffett selling stocks at a time where stocks were already off their highs, some people use that as a red flag to go out there and sell some more and then last but not least, here is Where is all that?

A. I chat money in tech earnings.

We've seen Microsoft alphabet, you name it.

I go back to sales force a couple of weeks ago as well.

We're not seeing, uh, I think a lot of these big cap tech companies justify their valuations based on what they're seeing in all things, a I. I was talking to a couple of investor relations people at one prominent Tech company late last week, and they readily acknowledge guys, they're not making large sums of money on a I.

But is it a different story 10 years from now?

Sure, absolutely.

But in this market today, at least, investors don't care about what's going to happen.

10 years know so ren, I guess from the sources that you're talking to, how are they thinking about this debt that we're seeing right now.

Is it a buying opportunity?

Are we expected to see more pressure hedges?

Given all that uncertainty and some of the trends that you are seeing play out right now in the market and also just given where we are in the earnings cycle as well, I still don't get the sense that, uh, there's an appetite to come in and buy.

Buy, buy.

There's this.

This You do this for long enough, Sean, as you, both of you.

You know, you can just hear things in people's voices.

There's, I think there's still more concern out there on the street, but, uh, tidy list.

I think I want to share with you guys.

Three Yahoo finance reminders during this summer sell off first.

This is not a panic.

Uh, one of the first stories that I woke up to this morning.

Uh, not on our site was, uh, someone calling this a panic.

I hate that word.

I think it sparks more fear and concern out there on the markets.

This is what markets do.

Uh, they're trying to find, uh, the source of truth.

This is price discovery in real time.

This is not a panic number two.

This is not yet a wash out, which is something we were just talking about.

All the bad news is priced in.

I'm still hearing a lot of fear in the voice of, uh, markets out there.

I'm not saying at least, uh, the people that I've talked to not saying, Hey, I'm going all in on Apple here.

I'm really buying this dip on on on Tesla, and I'm not buying all this, uh, really buying the dip on NVIDIA too, as well.

And then last but not least, NVIDIA's fundamentals and not change.

And Sean, I really loved your column on Sunday.

I encourage everyone to check it out.

It is blowing up on the finance charts this morning.

Uh, there's there's still this tug of war Blackwell chips, as you mentioned, but people they they seem to want to sell NVIDIA right now.

I know you made the case that maybe, uh, based on the people you're talking to, people want to come in there and buy NVIDIA.

Maybe that's the case, but I would just encourage everyone to remember the fundamentals have not changed on NVIDIA.

Even though you're seeing the stock price get absolutely creamed.

Yeah, and I think the question is what exactly is going to be that catalyst?

And it's impossible.

You talked to a strategist upon strategist who says it's impossible to time the market at any given point, especially given so much uncertainty right now.

But at least the sources I was talking to within that piece were laying out the case as to why earnings, when we do see the results from NVIDIA, could be a catalyst for NVIDIA specifically and some of those chip plays.

But again, you also see the type of action that you're seeing today, the selling the downward movement.

There's a lot of people that I think feel a little bit more comfortable, at least for now saying on there.

And that's why I just quickly mention this is not Shawna Smith saying Go out and buy that NVIDIA dip.

This is your sources.

So don't blame Sean.

If this goes the other side, she's just reporting.

During her work