A trader works at the New York Stock Exchange NYSE in New York.
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Stocks declined Tuesday as technology names struggled and new economic data rekindled fears around the health of the economy.
The Dow Jones Industrial Average traded 566 points lower, or 1.4%. The S&P 500 slid 1.8%. The Nasdaq Composite dropped 3.1%, putting the tech-heavy index on pace for its worst day since Aug. 5’s global market rout.
Stocks felt downward pressure as Nvidia, the high-flying artificial intelligence darling that has captured investor attention for more than a year, dropped more than 8%. It was one of several semiconductor stocks including Micron, KLA and Advanced Micro Devices seeing declines in the session. The VanEck Semiconductor ETF (SMH) slid more than 6%.
The market also took a leg down Tuesday morning after two readings of manufacturing production showed signs of weakness. S&P Global’s showed a decline from July to August, while the Institute for Supply Management’s came in under the level anticipated by economists polled by Dow Jones. This data reignited concerns around slowing growth within the U.S. economy, which helped drive a closely watched sell-off early last month.
“The market right now seems to be very jumpy to any data that comes in,” said Larry Tentarelli, chief technical strategist at the Blue Chip Trend Report. “We’ve become a very data-dependent market.”
Tuesday’s moves kick off the new trading month after the three major averages finished August with gains. U.S. markets were closed Monday due to the Labor Day holiday.
But the momentum for stocks into September wasn’t always expected. Concern over the U.S. economy falling into a recession, along with the unwinding of a popular hedge fund trade involving the Japanese yen, sent stocks tumbling in early August. At one point, the S&P 500 was down more than 7% for the month before recovering.
This action comes ahead of the first major economic report of the month on Friday, when the U.S. government releases the August jobs report. Wall Street will also have to contend with seasonal headwinds, as September has been the worst month on average for the S&P 500 over the last 10 years.
