| Good morning. Global stocks are extending yesterday's decline with tech shares feeling the brunt of the pain. More so for Nvidia, thanks to a subpoena from the Department of Justice. Meanwhile, attention is turning to today's jobs data, which will give further clues as to the state of the US economy and the Fed's rate path. Here's what traders are talking about. — Morwenna Coniam. Want to receive this newsletter in Spanish? Sign up to get the Five Things: Spanish Edition newsletter. A global flight from risk assets continued on Wednesday after fears about the US economy and a retreat from big tech triggered a sharp decline in US stocks, which yesterday saw the biggest selloff since the Aug. 5 meltdown. European stocks followed Asian indexes lower, with technology stocks taking the biggest losses. US stocks are poised to extend declines today, with Nasdaq futures falling the most. Nvidia shares are poised to drop further after the US Justice Department sent subpoenas to the firm and other companies as it seeks evidence the chipmaker violated antitrust laws . Officials are concerned Nvidia is making it harder to switch to other suppliers and penalizes buyers that don't exclusively use its artificial intelligence chips. The DOJ, which had previously delivered questionnaires to companies, is now sending legally binding requests that oblige recipients to provide information, taking the government a step closer to launching a formal complaint. A US job openings report due on Wednesday is expected to show further cooling in the labor market, following yesterday's data showing a fifth consecutive month of contraction in manufacturing activity. The jobs report will give a further clues as to whether the US economy is on the brink of recession and how the Federal Reserve will proceed when it comes to monetary policy. With that data in view, treasuries gained for a second day as traders added to bets on a jumbo Fed cut this month. The chance of a half-point reduction has increased to about 30% from 20% last week, according to swaps. Meanwhile, a dollar gauge snapped a five-day winning streak while the yen extended gains and oil sank even further after crashing to the lowest level this year Elsewhere, as fears mount over the state of China's economy, the country is considering cutting interest rates on as much as $5.3 trillion of mortgages to lower borrowing costs for millions of families while mitigating the profit squeeze on its banking system. Financial regulators have proposed reducing rates on outstanding mortgages nationwide by a total of about 80 basis points in two steps, part of a package that includes an accelerated timeline for when mortgages become eligible for refinancing, according to people familiar with the matter. This is what's caught our eye over the past 24 hours. So now it's twice in a row where we've seen fireworks at the start of the month. Of course, Aug. 5 was the really big one, where the VIX shot up to around 65, and everyone became really fixated on the Yen carry trade. Yesterday, we saw some yen strength and another VIX spike, though it was all a bit less extreme than before. Here's a look at the VIX (yellow) and high yield credit spreads (white). The latter remains extremely low. Once again, there's no single obvious story. Markets have been on fire for most of last month. After that VIX spike things calmed down in record time, and basically it seemed like everyone treated that day to a bad memory. So what happened? Hard to say. One possibility is that anxiety about the economy's ability to land softly is back on the rise. This was probably part of the story in early August, and may be part of the story now. Yesterday we got a weak S&P PMI, a weak July construction spending print, and an ISM manufacturing report that showed the Prices Paid Index rising by more than expected, while the Employment Index remained in contraction. New orders also came in weak looking. In a note to clients, Nomura's Charlie McElligott writes: "And similar to the end July NFP / U-Rate "Fed Policy Error" scare which lead to the "Hard Landing" Tail being repriced sharply hire helping to then set-off a chain of events in the Vol space, this latest (and admittedly much smaller) US Economic "Landing Path" uncertainty around "any" US Growth data (like today's B- and C- list releases) then too coincided with some spicy Hedging –flows in the VIX Options space from this past Friday which seemingly helped to get things rolling downhill." As I talked about yesterday, the big event this week will be Friday's Non-Farm Payrolls report, but in the meantime today we get JOLTS, Factory Orders, and the latest total US vehicle sales. So if they're interesting at the margins, then perhaps we'll see more heightened action in the markets. Follow Bloomberg's Joe Weisenthal on X @TheStalwart | 
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