Dow drops 388 points as US stocks suffer worst loss since March on weak economic data
Richard Drew/AP
- US stocks tumbled on Tuesday as weak economic data sparked the worst loss since March.
- Readings on sales of new homes and consumer confidence came in below forecasts.
- Investors are also contending with a possible interest rate hike and a government shutdown.
US stocks plummeted on Tuesday as weak economic data sparked fears of a recession, adding to worries about rates and a government shutdown.
The Consumer Confidence Index slid to 103, falling under August's 108.7 and missing views for 105.5, and a gauge of expectations reached a level usually associated with recessions, Conference Board reported.
Meanwhile, new home sales in fell 8.7% in August from July, missing expectations. At the same time, home prices continued to ascend, with the Case-Shiller index growing 1% in July compared to a year ago.
"So far, higher interest rates haven't made a dent in housing prices this year. And it doesn't appear that trend is anywhere close to being broken," Jamie Cox, Managing Partner for Harris Financial Group said.
Before this, investors were already grappling with uncertainty, as the Federal Reserve indicated that another interest rate could come up before the year end. Meanwhile, a government shutdown looks increasingly likely, which would put immediate downside pressure on markets.
Here's where US indexes stood shortly after the 4:00 p.m. closing bell on Tuesday:
- S&P 500: 4,273.53, down 1.47%
- Dow Jones Industrial Average: 33,618.88, down 1.14% (388.00 points)
- Nasdaq Composite: 13,063.61, down 1.57%
Here's what else is going on today:
- A landmark monopoly lawsuit against Amazon sent the tech giant's shares down on Tuesday.
- Investors should replace growth stocks with value equities as inflation is set to rebound, Rob Arnott said.
- The S&P 500 will hit a new all-time high in 2024, JPMorgan said.
- A federal shutdown would delay key economic data, making the Fed's job more difficult.
- MicroStrategy added $150 million worth of bitcoin to its trove since August.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil rose 1.03% to $90.04 a barrel. Brent crude, the international benchmark, inched up 0.76% to $92.66 a barrel.
- Gold stayed essentially flat at $1,900.46.
- The yield on the 10-year Treasury bond edged up one basis point to 4.554%.
- Bitcoin declined 0.43% $26,188.