On Tuesday, the Dow Jones Industrial Average plunged by 626 points, sparking concern across major indices as the S&P 500 and Nasdaq Composite also closed with heavy losses. New economic data reignited fears about the health of the economy.
After U.S. markets were closed on September 2nd for Labor Day, Tuesday’s trading quickly shifted focus to economic worries, leading to a sharp selloff. Tech stocks bore the brunt of the losses, dragging all major indices down. The Dow Jones ended the day down by 626.15 points, or 1.51%, while the S&P 500 dropped 2.12%, closing at 5,528.93. The Nasdaq Composite took the hardest hit, plummeting 3.26% to finish at 17,136.30.
The semiconductor sector was among the worst affected, with Nvidia tumbling over 9%, followed by declines in Micron and Advanced Micro Devices. The VanEck Semiconductor ETF slumped more than 7%, further dragging down the S&P 500’s tech sector, which suffered its worst day since September 2022.
The selloff was fueled by troubling new economic data pointing to weakness in manufacturing. Reports from S&P Global and the Institute for Supply Management indicated a slowdown in growth, reigniting fears of a potential recession in the United States.
Investors are now anxiously awaiting the August jobs report, due on Friday, as Wall Street braces for the seasonal challenges of September, a historically tough month for the S&P 500.
The Federal Reserve’s focus on inflation data remains crucial for upcoming interest rate decisions. While markets have shown signs of confidence, the evolution of inflation and broader economic conditions will heavily influence the central bank’s monetary policy in the coming months. Investors will closely monitor economic data to gauge market trends and the Fed’s future moves.
On Tuesday, oil prices plunged by more than 3%, erasing all of the year’s gains. U.S. crude dropped to $70.76 per barrel, while Brent, the global benchmark, fell to $74.29 per barrel, marking its lowest level since December 2023.
The market was affected by forecasts of increased production from OPEC+ in October and signs of slowing manufacturing activity in China, which outweighed the impact of production disruptions in Libya, contributing to the price decline.
Meanwhile, in Asian markets, concerns related to China continued to weigh on stocks, following Canada’s announcement of new tariffs targeting the Chinese electric vehicle industry. This decision contributed to declines in the Shanghai Shenzhen CSI 300 and Shanghai Composite indices, which fell by 0.7% and 0.3%, respectively.
Although the direct economic impact of these tariffs is considered negative, investors are even more concerned about the potential for a new trade war between China and the West. The fear is that Canadian tariffs could trigger further retaliation, in an already tense environment following similar measures by the United States and European Union earlier this year. Investors are watching with unease the potential impact of a prolonged trade conflict, which could harm not only China’s industry but also global economic growth.
Tuesday, September 3, 2024 Market Close:
- Dow Jones: -1.51% at 40,936.93
- S&P 500: -2.12% at 5,528.93
- Nasdaq Composite: -3.26% at 17,136.30
Discussion about this post