Dow down over 1,000 points after Nikkei's record stock plunge rattles world markets

The Dow Jones Industrial Average tanked over 1,000 points in early trading Monday after Japan's Nikkei suffered its worst plunge since its 1987 Black Monday crash, triggered by fears about a weakening American economy.

The Nikkei fell 12.4% Monday in a sales panic, which was quickly followed by drops in indexes in South Korea and Taiwan, which were both down more than 8%.

European shares were down 2.6% in near six-month lows, Reuters reported, and rippled through to Wall Street stock trading with the Dow's performance the worst in two years.

The loss of 4,451.28 points on the Nikkei was its largest single-day drop ever. The plunge wiped out all stock gains this year.

The Nikkei has fallen 25% over the last four weeks alone after hitting a record high July 11.

At the same time the value of the yen has strengthened to 142 to the dollar, compared with about 161 to the dollar in early July, which erodes the competitive power of the nation's exports.

The jitters that began in Japan were triggered by weaker than expected recent U.S. job growth with an increased 4.3% unemployment rate as investors await a Federal Reserve decision on the nterest rate.

"Signs of emerging weakness in the U.S. economy are evident, with negative indicators from hiring, retail sales, and PMI reports," Bruno Schneller, managing partner at Erlen Capital Management, told Reuters.He noted, however that American GDP and trade remained stable.

Goldman Sachs analysts estimate a 25% chance of a U.S. recession, but also noted the Federal Reserve's ability to reignite market optimism, according to Reuters.

Donald Trump quickly took advantage of the downturn to blame the Democratic administration, including his likely opponent Vice President Kamala Harris, branding the stock dive the "Kamala Crash."

Some economists, however, have accused Trump and his administration of launching simmering problems now hatching with massive COVID subsidies, a mammoth tax break for corporations and the wealthy, and an exploding federal deficit.

Trump's tax cuts "never delivered promised growth," budget deficits surged, and his tariffs and trade deals never brought back all of the lost factory jobs, the Associated Press reported.