Wall Street Stumbles Over Weak Factory Data and Rate Cut Speculations

Wall Street's main indexes dropped over 1% on Tuesday after weak U.S. manufacturing data and elevated concerns over a potential rate cut by the Federal Reserve. Key stocks such as Nvidia and Microsoft plummeted, impacting the Nasdaq significantly while investors keenly await further labor market reports due this week.

Wall Street's key indexes experienced a decline of over 1% on Tuesday as investors grappled with sluggish factory activity data ahead of multiple labor market reports expected this week, which could influence the Federal Reserve's monetary policy decisions.

The U.S. manufacturing sector showed a slight improvement in August, rising from July's eight-month low, but employment struggles continued. The S&P 500 industrials sector dropped more than 1.6%, with corporations like Caterpillar and 3M affecting the Dow.

The Nasdaq reached a three-week low amid a historically weak trading month. Nvidia and Microsoft led the declines, with the Philadelphia SE Semiconductor index falling 5.7%. Eyes now turn to Friday's critical non-farm payrolls data for further insights into the labor market and potential Fed interest rate adjustments.

(With inputs from agencies.)