Stocks in Wall Street took a sharp decline on Tuesday as technology companies faced difficulties and fresh economic indicators reignited worries about the state of the economy.
The Dow Jones Industrial Average plummeted by 626.15 points or 1.51%, settling at 40,936.93, while the S&P 500 saw a 2.12% decrease, closing at 5,528.93. The Nasdaq Composite experienced the largest drop, declining by 3.26% and ending the session at 17,136.30. This downturn marked the worst performance for all three indices since the global market turmoil on August 5th.
Chip stocks exerted a downward pressure on the market, particularly impacting high-performing companies like Nvidia, which witnessed a significant drop of over 9%. Other semiconductor manufacturers such as Micron, KLA, and Advanced Micro Devices also experienced declines during the trading session.
The market started to decline early on Tuesday following reports indicating a slowdown in manufacturing production. According to the Institute for Supply Management, U.S. factory activity in August was below expectations.
The ISM manufacturing index for the month stood at 47.2%, showing a slight increase of 0.4 percentage points from July but falling short of the Dow Jones consensus estimate of 47.9%. A reading below 50% on the index suggests contraction, reflecting the percentage of companies reporting a decrease in expansion.
Other components of the survey revealed that although the employment index rose marginally to 46%, it remained in negative territory. Metrics for new orders and supplier deliveries declined, while inventories increased. Additionally, the prices index rose slightly to 54%, indicating higher levels of inflation.
