Wall Street Tumbles Over 1% Amid Mixed Factory Activity Data
Wall Street's main indexes fell over 1% due to mixed factory activity data and anticipation of upcoming labor market reports. The S&P 500 industrials sector and rate-sensitive chip stocks showed significant declines. Investors speculate on Federal Reserve's potential interest rate cuts. Defensive sectors saw marginal gains.
Wall Street experienced a significant decline as its main indexes fell over 1%, attributed to mixed factory activity data and anticipation of numerous labor market reports due this week. These reports could influence the Federal Reserve's monetary policy decisions for the year.
In August, U.S. manufacturing saw slight improvement in employment, yet the overall trend pointed to continued subdued activity. The S&P 500 industrials sector dropped more than 1.6%, impacted by stocks like Caterpillar and 3M. Rate-sensitive tech stocks also faced a downturn, with Nvidia plunging 5.4% and sending the Philadelphia SE Semiconductor index down 4.1%. Tech giants Apple and Alphabet saw declines over 1.6% each.
Investors are closely watching labor market reports leading up to Friday's non-farm payrolls data for August. July's report hinted at a significant slowdown, triggering a global selloff in riskier assets. The Federal Reserve's upcoming meeting, as well as Chair Jerome Powell's support for policy adjustments, is also under scrutiny. The Dow Jones Industrial Average fell 431.56 points, the S&P 500 lost 63.42 points, and the Nasdaq Composite shed 263.57 points as of Tuesday morning.
Energy stocks plummeted by 3% due to weak crude prices, while defensive sectors like consumer staples and healthcare saw slight gains. Sam Stovall from CFRA Research noted that some investors are taking profits early in what is historically a weak month. Despite this, the Dow nears its record high and the S&P 500 is close to a milestone. Tesla saw a minor uptick after announcing plans to produce a new variant of its Model Y, while Boeing fell 8% following a downgrade by Wells Fargo.
(With inputs from agencies.)
ALSO READ
Chile's Central Bank Cuts Interest Rate Again: What It Means for Inflation
Brazil's Economy Surges Despite Challenges: Interest Rate Hike Looms
Chile's Central Bank Lowers Interest Rate by 25 Basis Points
Market Jitters: S&P 500 Stands Still as Nasdaq Slips Amid Economic Uncertainty
Kamala Harris' Tax Proposal and Its Impact on S&P 500 Earnings