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On August 5, panic was still spreading in global financial markets.

In the afternoon, Asian and Pacific stock markets plummeted, Japanese stocks continued to fall sharply, and the Korean stock market plunged, triggering the circuit breaker mechanism.

A shares were relatively strong in the morning, but the decline widened in the afternoon.

Cross-border ETFs fell collectively.

In the afternoon, Asia-Pacific stock markets extended losses.

Japan's Topix index futures triggered the circuit breaker mechanism again, and trading was suspended for the second time today.

As of the close, the Nikkei 225 index closed down 12.4%, falling more than 4,400 points on the day.

The Nikkei 225 Volatility Index quickly expanded to 132%, setting a new single-day record.

South Korea's stock market also plummeted, with the KOSPI200 index and the Korea Composite Index both falling by more than 8%.

The South Korean Stock Exchange's KOSDAQ index plummeted 8%, triggering the circuit breaker mechanism. After trading resumed, the decline widened to 9%.

Australian shares were not immune, with the benchmark index falling more than 3%, its biggest one-day drop since June 2022.

A-shares were relatively strong in the morning, but the decline widened in the afternoon. The Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index all fell by more than 1% at one point. Consumer electronics, computing power, semiconductor chips and other sectors saw the largest declines, with nearly 4,200 stocks falling in the Shanghai, Shenzhen and Beijing markets.

The Taiwan Stock Exchange's weighted stock price index closed down 8.4%, the largest single-day drop in history, at 19,830.88 points, falling to its lowest closing level since April 23.

Driven by the sharp drop in external stock markets, many cross-border ETFs continued to fall. Japan's Topix Index ETF (513800), Nikkei 225 ETF (513880), and Nasdaq Technology ETF (159509) all hit the daily limit in the afternoon.

Nasdaq ETF (513300), Nikkei 225 ETF E Fund (513000), Nasdaq ETF (513100), Nikkei ETF (159866) and others fell by more than 7%.

The trigger for the global panic was the US non-farm data that fell short of expectations last week, which triggered the market's early warning of a US economic recession. However, under such circumstances, the Federal Reserve still insisted on not cutting interest rates.

Tesla CEO Elon Musk issued a new warning in response to this. Commenting on Buffett's stock reduction, he criticized the Fed for not cutting interest rates sooner, saying it was "stupid." Apparently, Musk was using Buffett's stock selling post to express his dissatisfaction with the Fed.

DoubleLine Capital CEO and "new bond king" Jeffrey Gundlach also commented that the Federal Reserve should have started a rate cut cycle last Wednesday.

Gundlach believes that the U.S. economy is not that strong. Labor market conditions are weakening, partly due to rising unemployment. When the Fed actually starts to cut interest rates, it may be too late.

The latest news shows that economists at Goldman Sachs have raised the probability of a US recession next year from 15% to 25%.

It is worth noting that Goldman Sachs' forecast for the Fed is not as aggressive as that of JPMorgan and Citigroup. Hatzius' team expects the Fed to cut its benchmark interest rate by 25 basis points in September, November and December; in contrast, JPMorgan and Citigroup expect a 50 basis point cut in September.

Editor: Chen Lixiang

Proofreader: Yang Lilin