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Apple ( AAPL ) falls as Berkshire halves stake

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Two Fed heads scheduled to speak later in the day

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Wall Street "fear gauge" at over four year high

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Futures down: Dow 1.9%, S&P 500 3%, Nasdaq 4.7%

(Updated at 6:45 a.m. ET/ 1045 GMT)

By Shubham Batra and Shashwat Chauhan

Aug 5 (Reuters) - U.S. stock index futures tumbled on

Monday, with those tied to the Nasdaq sliding almost 5%, as

fears of the United States tipping into recession following weak

data last week rippled through global markets.

Bourses from Asia to Europe took a beating and bond yields

slid as investors rushed to safe-haven assets and bet the U.S.

Federal Reserve would need to cut interest rates quickly to spur

growth.

All megacap and growth stocks, the main drivers for the

indexes hitting record highs earlier this year, fell sharply in

premarket trading.

Apple ( AAPL ) slumped 8.4% after Berkshire Hathaway ( BRK/A )

slashed its stake in the iPhone maker by almost 50%,

suggesting that billionaire investor Warren Buffett is growing

wary about the broader U.S. economy or stock market valuations

that have gotten too high.

Nvidia ( NVDA ) slid 9.7% after reports of a delay in the

launch of its upcoming artificial-intelligence chips due to

design flaws. Microsoft ( MSFT ) fell 4.7%, while Alphabet

slid 6%.

At 06:45 a.m. ET, Dow E-minis were down 775 points,

or 1.94%, S&P 500 E-minis were down 160.75 points, or

2.99% and Nasdaq 100 E-minis were down 862 points, or

4.65%.

A weak jobs report and shrinking manufacturing activity

in the world's largest economy, coupled with dismal forecasts

from the big U.S. technology firms, pushed the Nasdaq 100

and the Nasdaq Composite into a correction last week.

The disappointing jobs data also triggered what is known as

the "Sahm Rule", seen by many as a historically accurate

recession indicator.

Traders now see a 98.5% probability that the U.S.

central bank will cut benchmark rates by 50 basis points in

September, compared to an 11% chance seen last week, according

to CME's FedWatch Tool.

Big Wall Street brokerages also revised their Fed rate

projections for 2024 to show greater policy easing by the

central bank.

"I am reluctant to believe the Fed would start the easing

process with a 50 bps cut, but if the next seven weeks of data

are consistent with this week's, the Fed should be aggressive,"

said Ronald Temple, chief market strategist at Lazard.

Yields on U.S. government bonds hit multi-month lows, with

the 10-year note last at 3.7379%, while the two-year

slipped to 3.7561%.

The CBOE Volatility index, also known as Wall

Street's "fear gauge", breached its long-term average level of

20 points last week and was currently at 53.11, highest since

April 2020.

A slew of Fed officials will speak on the economy and

monetary policy through the week and any indication on interest

rate cuts could soothe frayed nerves of investors.

Chicago Fed President Austan Goolsbee and San Francisco Fed

President Mary Daly are slated to speak later in the day.

Futures tracking small-cap index Russell 2000

dipped 4.9%.

Crypto-linked stocks fell after Bitcoin hit its

lowest in five months. Coinbase Global ( COIN ) was down 13%,

while MicroStrategy ( MSTR ) and Riot Platforms ( RIOT ) were

down 15.8% and 12.2%, respectively.

Big U.S. lenders were down, with Bank of America ( BAC )

leading the losses with a 4.5% fall.