The main reason why Stock futures are plunging is because the Yen carry trade is blowing up again. This week could be very bloody. In August 2024, Japan hiked rates from 0.1% to 0.25%, causing a flash crash. Now, they’ve raised rates to 0.5%, with 2-year yields at 0.71%. Why is this bearish? Well, higher Japanese rates are ending the yen carry trade, where investors borrow cheap yen to invest in other assets. Now that borrowing costs are rising, it means they have to sell off assets to pay back their loans.