Stock Market Today: Wall Street Heads for Worst Day in Almost a Month

NEW YORK (AP) — The U.S. stock market fell Tuesday after a disappointingly weak start to a week full of economic updates.

The S&P 500 was down 1.4% at midday, on track for its worst day in nearly a month after a strong week that lifted it to an all-time high. The Dow Jones Industrial Average was down 436 points, or 1.1%, from its own record set Friday before Monday’s Labor Day holiday. The Nasdaq Composite was down 2.3% as of 11:45 a.m. ET.

Treasury yields also fell in the bond market after a report showed U.S. manufacturing shrank again in August as it continues to wilt under the weight of high interest rates. Manufacturing has been shrinking for most of the past two years, and its August performance was worse than economists had expected.

“Demand remains subdued as companies are reluctant to invest in capital and inventory due to the federal government’s current monetary policy and election uncertainty,” said Timothy Fiore, chairman of the Institute for Supply Management’s Manufacturing Research Committee.

Fears about a slowing U.S. economy contributed to a terrifying summer swoon for stocks early last month, but financial markets later rebounded on hopes that the Federal Reserve could make a perfect landing for the economy. After raising its key interest rate to its highest level in two decades to beat high inflation, the Fed appears poised to cut interest rates later this month in hopes of easing conditions for the economy and avoiding a recession.

Other reports later in the week that could show how much help the economy needs include updates on the number of job openings that U.S. employers advertised in late July and how strongly U.S. service companies expanded last month. The week’s biggest moment likely comes Friday, when a report will show how many jobs U.S. employers created in August.

The jobs report has once again become the stock market’s top event each month, replacing inflation updates, according to analysts at Bank of America. Many traders expect the Fed to cut interest rates by a full percentage point this year, an amount that is “the size of a recession,” Gonzalo Asis and other economists and strategists wrote in a report from BofA Global Research.

On Wall Street, shares of U.S. Steel fell 5.3% in early trading after Vice President Kamala Harris said Monday she opposes the company’s planned sale to Japan’s Nippon Steel. The Democratic presidential candidate’s comments, which mirror President Joe Biden’s stance, come after Nippon Steel Corp. said last week it would spend an additional $1.3 billion to modernize plants in Pennsylvania and Indiana, on top of a previous commitment of $1.4 billion.

Nippon Steel also reiterated that it expects the deal to be completed by the end of this year, despite ongoing opposition from politicians and labor unions.

Nvidia was by far the heaviest drag on the S&P 500, down 7.2%. Its shares have struggled even after the chipmaker beat high expectations in its latest earnings report. The muted results could fuel criticism that Nvidia’s stock and other Big Tech stocks have simply risen too high amid Wall Street’s rush into artificial intelligence technology.

Oil and gas stocks also helped drag the market lower after the price of crude oil fell about 4% on concerns about how much fuel the global economy will burn. A barrel of benchmark U.S. crude is almost back to $70, down this year after rising above $85 in April.

Exxon Mobil fell 2.3% and ConocoPhillips lost 3%.

Still, it wasn’t a complete washout for Wall Street. More than 1 in 3 stocks in the S&P 500 rose, led by those that tend to benefit the most from lower interest rates. That includes dividend-paying stocks as well as companies whose earnings are less closely tied to the ebb and flow of the economy, such as utilities and consumer goods makers.

In the bond market, the yield on the 10-year Treasury note fell to 3.85% from 3.91% on Friday evening. That’s down from 4.70% in late April, a significant move for the bond market.

On overseas stock markets, indexes fell across much of Europe and Asia.

Concerns about China’s economic resilience have been growing as recent data has painted a mixed picture. Weak earnings reports from Chinese companies, including real estate developer and investor New World Development Co., added to the pessimism.

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AP business writers Yuri Kageyama and Matt Ott contributed to this report.

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