Global markets are experiencing intense volatility, and while it seemed like a Black Monday for Wall Street was inevitable following a 13% overnight tumble of Japan’s Nikkei 225, stock indices are attempting to limit early session losses by midday trading in New York.

The inflection point came after July’s services sector activity surveys revealed improved conditions from June and a stronger-than-expected expansion, easing fears of an imminent U.S. recession.

In July, business sentiment in the U.S. services sector returned to expansion, with the ISM Services Purchasing Managers’ Index (PMI) rising from 48.8% to 51.4%, surpassing expectations of an increase to 51%.

Before the ISM data release, traders speculated on an intra-meeting Fed interest rate cut after Chicago Fed President Austan Goolsbee stated in a CNBC interview that everything could be on the table.

Following the data, market-implied probabilities for a 50-basis-point rate cut decreased from 100% to about 80%, while the likelihood of a smaller 25-basis-point increase rose from about 0% to 20%, according to the CME Group FedWatch Tool.

After opening over 4% lower at 5,120 points, the S&P 500 slightly trimmed its losses to 5,233 by 12:30 p.m. in New York, marking a smaller 2.1% decline for the day.

Similar movements were observed in the tech-heavy Nasdaq 100, blue-chip stocks tracked by the Dow Jones and small-cap stocks.

As interest rate probabilities shifted, bonds halted their gains, and Treasury yields rose across all maturities. The 2-year Treasury yield traded 4 basis points higher at 3.92%, after having fallen to as low as 3.65% during early trading hours.

The popular iShares 20+Year Treasury Bond ETF TLT was unchanged, following seven straight sessions of gains.

Bitcoin BTC/USD initially fell by 15% at 9:30 a.m. in New York, but then rallied by 10% between 9:30 a.m. and 12:30 p.m., reducing its daily losses to 5.9%.

Commodities traded lower across the board, with gold and oil down 1.5% and 1.3%, respectively. Silver plunged nearly 5%, in its worst session in two months.

Monday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

The SPDR S&P 500 ETF Trust SPY was 2.2% lower to $520.50.

The SPDR Dow Jones Industrial Average DIA fell 2.1% to $388.75.

The tech-heavy Invesco QQQ Trust Series QQQ fell 2.3% to $438.40.

The iShares Russell 2000 ETF IWM tanked 2.7% to $203.26.

Sector-wise, the Real Estate Select Sector SPDR Fund XLRE experienced the smallest decline, down 1.2%, while the Technology Select Sector SPDR Fund XLK saw the largest drop, falling by 2.8%.

Monday’s Stock Movers

Kellanova K soared over 14% after the Wall Street Journal reported that privately held Mars is in advanced talks to acquire the Pringles maker.

Stocks reacting to earnings included:

BioNTech SE BNTX, down 2.54%,

The Carlyle Group Inc. CG, down 8%,

Tyson Foods, Inc. TSN, up 4%.

Those reporting after the close are ADTRAN Holdings, Inc. ADTN, Avis Budget Group, Inc. CAR, Diamondback Energy, Inc. FANG, CSX Corp CSX, Navitas Semiconductor Corporation NVTS, J&J Snack Foods Corp. JJSF, Palantir Technologies Inc. PLTR and Yum China Holdings, Inc. YUMC.

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