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US indexes fell sharply on Tuesday after weak manufacturing data raised fresh concerns about the economy.
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The ISM Manufacturing index missed expectations and investors now await August’s employment figures.
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The Nasdaq tech exchange fell more than 3%, mainly due to a sharp drop in Nvidia shares.
Stock prices fell on Tuesday as manufacturing figures undermined confidence in the US economy.
The S&P 500 and Dow Jones Industrial Average lost 2% and 1.5%, respectively. The tech-heavy Nasdaq fell more than 3% as a sharp decline in Nvidia exacerbated the index’s decline.
Tuesday’s aftermath marks the worst day for stocks since the stock market crash in early August and marks a dismal start to September, historically a bad month for the stock market.
Weak manufacturing print added to Tuesday’s selloff as the ISM Manufacturing Purchasing Managers Index missed expectations. The index rose 47.2% in August, below consensus expectations of 47.9%.
“Manufacturing employment contracted for the third straight month as production activity slowed in recent months. While manufacturing now accounts for a smaller share of the macroeconomy than in previous cycles, investors should still position themselves for a broader slowdown through the remainder of this year,” said Jeffrey Roach, chief economist at LPL Financial.
With slowing manufacturing activity fueling fears that the U.S. is headed for a slowdown, investors have more reason to hope for a strong jobs report on Friday.
All eyes are on the jobs numbers and any surprise in the labor figures could make or break the soft landing story.
Economists currently expect the US to have added 162,000 jobs last month, suggesting the unemployment rate will fall slightly from 4.3% to 4.2%.
If the forecasts are correct, the Federal Reserve could gradually cut rates by a quarter point at its upcoming September meeting. But a weaker-than-expected payrolls would prompt the bank to cut rates more than the market is currently pricing in.
Non-equity assets also suffered on Tuesday. As oil prices tumbled, the 10-year Treasury yield fell six points to 3.846%. Investors may want to brace for more volatility, as September has been known to be a challenging month for stocks.
Here’s where the US indices stood shortly after the 4pm closing bell on Tuesday:
Here’s what else is going on:
In commodities, bonds and crypto:
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West Texas Intermediate crude fell 4.38% to $70.33 a barrel. Brent crude, the international benchmark, fell 4.86% to $73.75 a barrel.
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Gold remained virtually flat at $2,523.1 an ounce.
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The 10-year US Treasury yield fell six points to 3.846%.
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Bitcoin fell 0.66% to $58,077.
Read the original article on Business Insider
