Traders work on the floor of the New York Stock Exchange during morning trading in New York City.
Michael M. Santiago | Getty Images News | Getty Images
Stocks tumbled Tuesday as technology names struggled and new economic data rekindled fears around the health of the economy.
The Dow Jones Industrial Average fell 626.15 points, or 1.51%, to end at 40,936.93. The S&P 500 slid 2.12%, closing at 5,528.93. The Nasdaq Composite dropped 3.26% and settled at 17,136.30. All three indexes notched their worst days since the global sell-off on Aug. 5.
Chip stocks weighed on the market, with high-flying Nvidia dropping more than 9%. Micron, KLA and Advanced Micro Devices also saw declines in the session.
As a whole, the VanEck Semiconductor ETF (SMH) slid more than 7%. The S&P 500's information technology sector led the broad index lower and saw its worst day since September 2022.
The market initially 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."
The Nasdaq Composite, 1-day
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 its recovery.
This action comes ahead of the first major economic release 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.
