A scary Monday that started with a plunge abroad reminiscent of 1987 ’s crash swept around the world and pummeled Wall Street with more steep losses, as fears worsened about a slowing U.S. economy. The S&P 500 dropped 3% for its worst day in nearly two years. The Dow Jones Industrial Average reeled by 1,033 points, or 2.6%, while the Nasdaq composite slid 3.4%. The drops were the latest in a global sell-off that began last week. Japan’s Nikkei 225 helped begin Monday by plunging 12.4% for its worst day since the Black Monday crash of 1987. It was the first chance for traders in Tokyo to react to Friday’s report showing U.S. employers slowed their hiring last month by much more than economists expected. That was the latest piece of data on the U.S. economy to come in weaker than expected, and it’s all raised fear the Federal Reserve has pressed the brakes on the U.S. economy by too much for too long through high interest rates in hopes of stifling inflation. Professional investors cautioned that some technical factors could be amplifying the action in markets, and that the drops may be overdone, but the losses were still neck-snapping. South Korea’s Kospi index careened 8.8% lower, and bitcoin dropped below $54,000 from more than $61,000 on Friday. Even gold, which has a reputation for offering safety during tumultuous times, slipped about 1%. That’s in part because traders began wondering if the damage has been so severe that the Federal Reserve will have to cut interest rates in an emergency meeting, before its next scheduled decision on Sept. 18. The yield on the two-year Treasury, which closely tracks expectations for the Fed, briefly sank below 3.70% during the morning from 3.88% late Friday and from 5% in April. It later recovered and pulled back to 3.89%. “The Fed could ride in on a white horse to save the day with a big rate cut, but the case for an inter-meeting cut seems flimsy,” said Brian Jacobsen, chief economist at Annex Wealth Management. “Those are usually reserved for emergencies, like COVID, and an unemployment rate of 4.3% doesn’t really seem like an emergency.” Of course, the U.S. economy is still growing, the U.S. stock market is still up a healthy amount for the year and a recession is far from a certainty. The Fed has been clear about the tightrope it began walking when it started hiking rates sharply in March 2022: Being too aggressive would choke the economy, but going too soft would give inflation more oxygen and hurt everyone. Goldman Sachs economist David Mericle sees a higher chance of a recession within the next 12 months following Friday’s jobs report. But he still sees only a 25% probability of that, up from 15%, in part “because the data look fine overall” and he does not “see major financial imbalances.” Some of Wall Street’s recent declines may simply be air coming out of a stock market that romped to dozens of all-time highs this year, in part on a frenzy around artificial-intelligence technology. Critics have been saying for a while that the stock market looked expensive after prices rose faster than corporate profits. “Markets tend to move higher like they’re climbing stairs, and they go down like they’re falling out […]