Wall Street kicked off the month of September with a bust, after a disappointing economic report dragged down the Dow by more than 600 points Tuesday afternoon.
The latest manufacturing report from the Institute for Supply Management showed a fifth-straight month of declines, pressuring traders who are already bracing for big news in September, from Friday’s key jobs report to next week’s inflation readings and then the long-awaited rate cut from the Federal Reserve mid-month.
The broader market also tumbled: The Nasdaq Composite fell by more than 3% as tech investors became skittish over AI darling Nvidia’s 9% plunge. Skepticism about the AI chipmaker’s valuation after a weak outlook last week continue to stoke fear, and questions are being raised about whether AI technology as a whole will help or hinder tech companies’ bottom lines.
Meanwhile, the benchmark S&P 500 moved about 2% lower.
September has historically been an ugly month for stocks, but Tuesday’s moves come after a similarly miserable start to August, when markets went into a tailspin: The S&P 500 sank more than 3%, the Dow lost 1,000 points and the Nasdaq Composite ventured further into correction territory. Investors were reacting to a weaker-than-expected jobs report that underscored fears that the Fed had mishandled inflation and pushed the economy right into a recession.
But markets soon corrected, ending the month with gains.
Oil also dropped Tuesday as concerns rose about softening global demand. Oil cartel OPEC is expected to increase output next month despite outages in Libya. International benchmark Brent fell to $73.70 a barrel and US benchmark West Texas Intermediate closed at just above $70 a barrel.
This is a developing story and will be updated.
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