Wall Street Tumbles as September Jitters and Economic Data Loom

Wall Street drops on September worries, upcoming data

STORY: U.S. stocks slumped on Tuesday to kick off one of the market's historically worst months. The Dow dropped one-point-five percent, the S&P 500 fell more than two percent and the tech-heavy Nasdaq plummeted three-and-a-quarter percent. Market sentiment fell as Institute for Supply Management data on Tuesday showed U.S. manufacturing remained subdued despite a modest improvement in August. "It looks like a big down day today..." Melissa Brown is managing director of investment decision research at Simcorp. "You do have the ISM (Institute for Supply Management) survey that came out a little bit disappointing and may be suggesting that we are closer to that soft landing or being in a recession than we were. And we all know that the Fed (Federal Reserve) is so data dependent, so they're probably going to be looking at this particular piece of data." The central bank will also be looking closely at Friday's non-farm payrolls data for August. Odds of a 25-basis point interest rate cut by the Fed later this month are more than 60%, the CME Group's FedWatch Tool showed. Investors see a less than 40% chance of a 50-basis point cut. The so-called Magnificent Seven megacap technology stocks, which have led this year's rally, plunged on Tuesday. Shares of Nvidia dropped 9.5%, as investors softened their optimism about AI. After the close, Bloomberg News reported that Nvidia received a subpoena from the U.S. Department of Justice as the regulator seeks evidence that the AI-heavyweight violated antitrust laws. Tesla fell more than 1.5% after Reuters reported that the electric vehicle maker plans to produce a six-seat variant of its Model Y car in China from late 2025. Outside of Big Tech, Boeing dropped more than 7% after Wells Fargo downgraded the planemaker's shares to "underweight" from "equal weight."

Dow dives 600 points amid tech weakness and renewed economic worries

The Dow tumbled over 600 points on Tuesday as disappointing performances from tech and AI stocks rattled investors, and fresh economic data resurfaced fears about the United States' economic health. Investor anxiety has intensified over whether the Federal Reserve will cut interest rates in September, reflecting growing impatience in the market. This week's upcoming job reports are highly anticipated, as they could provide crucial insights into the Fed's next move on interest rates. The data may offer a clearer picture of the U.S. labor market, potentially influencing the Fed's decision and shaping market expectations for the remainder of the month. Shortly before the market closed, the Dow plunged 618 points, or 1.49%, to 40,944. The Nasdaq dropped 3%, while the S&P 500 declined 1.9%. Meanwhile, fresh economic data highlighted potential weaknesses in the U.S. economy. The Institute for Supply Management (ISM) reported that U.S. manufacturing activity in August fell short of expectations, with the ISM manufacturing index coming in at 47.2%. Although this was a slight improvement from July's reading, it still trailed analysts' forecast of 47.9%, stoking fears of slowing economic growth. Nvidia, a darling stock of the AI sector, plummeted by over 8%. Micron Technology and Advanced Micro Devices also took significant hits, with each losing more than 7% of their value. In contrast, Super Micro Computer rebounded, gaining 2% after the company reassured customers and partners in response to a critical report from Hindenburg Research. The company stated that the report was misleading and contained false or inaccurate information, and it will address the report in due course. Trump Media & Technology Group stock has been on a downward trend for weeks, hitting new low after new low for much of August. As the markets opened after Labor Day weekend, Trump Media sunk even further. Shares of Trump Media, the company behind former President Donald Trump's Truth Social, dropped more than 6.5% Tuesday at $18. Since its debut on the Nasdaq on March 26 under the ticker DJT, the company's market value has plunged nearly 69%.