Investors were disappointed by Tuesday’s manufacturing data, which amplified fears that the US economy may be headed for a slowdown.
Stocks plunged Tuesday as manufacturing data chipped at confidence in the US economy.
The S&P 500 and Dow Jones Industrial Average shed 2% and 1.5%, respectively. The tech-heavy Nasdaq tumbled over 3%, as a sharp drop in Nvidia compounded the index’s decline.
Tuesday’s fallout marks the worst day for stocks since the market meltdown in early August and offered a grim introduction to September, which is historically a bad month for the stock market.
A weak manufacturing print intensified pressure on Tuesday’s sell-off, as the ISM Manufacturing Purchasing Managers Index failed to meet expectations. The index rose 47.2% in August, under 47.9% consensus forecasts.
“Manufacturing employment shrank for the third consecutive month as manufacturing activity slowed in recent months. Although the manufacturing sector holds a smaller portion of the macro economy now than in previous cycles, investors should still position themselves for a broader slowdown throughout the balance of this year”, LPL Financial chief economist Jeffrey Roach said.
