Stocks Fall Amid Economic Concerns

U.S. stocks declined significantly on Tuesday at the start of September, traditionally a tough month for markets. Market sentiment was affected by weak manufacturing data. The Fed's potential interest rate cut and upcoming labor market reports added to the market's cautious outlook.

U.S. stocks experienced a significant decline on Tuesday, marking a tough start to September, a month historically known for market downturns. The drop came ahead of crucial data that could impact Federal Reserve interest rate decisions.

Market sentiment dipped as the Institute for Supply Management reported that U.S. manufacturing remained weak, despite some improvement in August. Jason Browne, president at Alexis Investment Partners, highlighted the seasonal challenges, noting this followed a strong performance earlier in the year.

The decline was led by the Magnificent Seven megacap technology stocks, including Nvidia, Alphabet, Apple, and Microsoft. According to preliminary data, the S&P 500 fell by 2.10%, the Nasdaq Composite dropped 3.25%, and the Dow Jones Industrial Average decreased by 1.49%.

Investors are watching for labor market data and the Federal Reserve's meeting later this month. Fed Chair Jerome Powell has supported easing monetary policy, with a 63% chance of a 25-basis point cut and a 37% chance of a 50-basis point cut according to CME Group's FedWatch Tool.

Among individual stocks, Tesla fell following reports of its new production plans in China, while Boeing dropped after Wells Fargo downgraded its shares.

(With inputs from agencies.)