The stock market’s benchmark index, the S&P 500, has erased $1.2 trillion of its market capitalization since its daily high in just four hours after falling “in a literal straight line lower.”

That’s according to the economics outlet Kobeissi Letter, which noted on the microblogging platform X (formerly known as Twitter), who pointed out that the index erased the market capitalization of giants Walmart and JPMorgan combined in that little time.

The drop comes as recession worries grow after data from the Bureau of Labor Statistics revealed that the U.S. labor market added 114,000 nonfarm payroll jobs last month, against the 175,000 economists expected.

That data was release while the unemployment rate in the country rose to 4.3%, up from 4.1% in June, to its highest level since October 2021.

The drop comes shortly after a group of seven megacap tech stocks – often referred to as the Magnificent 7 – has lost more than $2.6 trillion in value over a 20-day period, making for an average of $125 billion per day over the period. In total, these stocks lost “triple the value of Brazil’s entire stock market.”

The tech titans, which have outperformed the broader S&P 500 since the market trough of 2022, are now facing a reckoning as investors are increasingly wary about the sustainability of their meteoric rise, with Nvidia for example surging more than 2,300% in the last five years.

Their poor performance comes after a prominent macroeconomist, Henrik Zeberg, reiterated his prediction of a looming recession that will be preceded by a final surge in key market sectors, but can potentially be the worst the market has seen since 1929, the worst bear market I Wall Street’s history.

Notably the Hindenburg Omen, a technical indicator designed to identify potential stock market crashes, has started flashing just one month after its previous signal, raising concerns that a stock market downturn could be coming.

The indicator compares the percentage of stock reaching new 52-week highs and lows to a specific threshold. When the number of stocks hitting both extremes surpasses a certain level, the indicator is said to be triggered, suggesting an increased risk of a crash.

Featured image via Unsplash.