Tuesday saw a decline in U.S. stocks as investors began a seasonally weak month for stocks by assessing the most recent trade-related events. Investors were also concerned about rising yields.
- Today's Market highlights
- Tesla's stock declines as the manufacturer of cars faces demand challenges in China, Europe, and now India.
- August marks the sixth consecutive month of declining US manufacturing activity.
- Nvidia's losses from last week continue as it drops 3%.
- Bonds decline due to uncertainty about the Fed and tariffs
- Major U.S. Stocks fall Down
The Dow Jones Industrial Average experienced a 1.2% decline of 525 points. The S&P 500 fell 1.5%, and the Nasdaq Composite fell 1.9%. With the unofficial end of summer, investors profited from bull market winners. For instance, Nvidia’s stock fell by nearly 3%.
The actions follow a federal appeals court’s decision on Friday that the majority of President Donald Trump’s international tariffs are unlawful.
In a 7-4 decision, the U.S. Court of Appeals for the Federal Circuit held that only Congress can impose sweeping levies. Trump has stated that he will appeal the decision to the U.S. Supreme Court and referred to it as “Highly Partisan.
“Additionally, investors anticipated a spike in bond yields beginning in September. The yield on the 10-year Treasury increased to 4.27%, but the 30-year yield exceeded 4.97%.
The possibility that the United States might have to return the billions collected from tariff revenue caused bond investors to push yields higher, further exacerbating the already precarious fiscal situation of the nation.
As a new trading month begins, those developments may have an impact on sentiment. The S&P 500 has dropped 4.2% on average over the last five years and more than 2% on average over the last ten, making September historically the worst month for stocks.
Ross Mayfield, an investment strategist at Baird Private Wealth Management, told CNBC that a 30-year Treasury of 5% is undoubtedly a headwind. “I believe it will remain a hindrance to stocks that are trading at relatively high valuations.”
Wall Street is recovering from a robust stock market month. The S&P 500 increased by almost 2% and crossed the 6,500 mark for the first time.
The release of the August jobs report on Friday and its potential impact on the Fed’s interest rate decision in the middle of the month are the major events that traders are anticipating.
According to Sam Stovall of CFRA Research, the S&P 500 added five new all-time highs in August, bringing the index’s year-to-date total to 20.
According to the company’s chief investment strategist, “the S&P 500 continued to post an average decline in September for those years in which the S&P 500 tallied 20 or more new highs through the end of August.” “While it waits for fresh catalysts, the market may give up some recent gains in the near future.”
Today’s Market highlights
Tesla’s stock declines as the manufacturer of cars faces demand challenges in China, Europe, and now India.
Following reports from all over the world that indicated persistent demand weakness in August, including in India, a new growth region for the EV maker, Tesla stock (TSLA) fell 1.6% on Tuesday morning.
August marks the sixth consecutive month of declining US manufacturing activity.
August was another slow month for the US manufacturing sector.
According to data released by the Institute for Supply Management on Tuesday, the ISM’s manufacturing PMI was 48.7 last month, which was higher than the 48 reading recorded in July but lower than the 48.9 reading that Bloomberg data predicted. A decline in sector activity is indicated by index readings below 50.
According to the ISM’s reading, the US manufacturing sector contracted for the sixth consecutive month.
Nvidia’s losses from last week continue as it drops 3%.
Nvidia (NVDA) stock fell roughly 3% Tuesday, extending a decline last Friday.
On Friday, Nvidia’s stock fell over 3%, and it lost roughly 2% for the week.
The decline on Friday followed the release of a third-quarter earnings outlook by Nvidia’s client, server manufacturer Dell (DELL), that fell short of Wall Street’s projections. Additionally, a recent report revealed that Chinese tech giant Alibaba (BABA) is testing a new chip to compete with Nvidia and AMD in China.
Bonds decline due to uncertainty about the Fed and tariffs
Like stocks, bonds began September under pressure as markets were impacted by a looming jobs report, uncertainty surrounding tariffs, and worries about the independence of the Federal Reserve.
Just below the crucial 5% threshold, the 30-year US Treasury yield (^TYX) increased 4 basis points to 4.95%. In the meantime, the 5-year yield (^FVX) increased 3 basis points to 3.73%, and the benchmark 10-year yield (^TNX) also increased 4 basis points to 4.26%.
Major U.S. Stocks fall Down
- AI data center operator and cloud provider CoreWeave (CRWV) saw shares drop 7.8% Tuesday morning.
- Amazon (AMZN) led a decline in the “Magnificent Seven” Big Tech stocks on Tuesday morning.
- US stocks sank on Tuesday to start September, which is historically the worst trading month of the year.
- Natural gas prices fall 3% after Russia announces major pipeline deal with China
- Nestlé Swiss-listed stock dipped just over 1% on Tuesday following the dismissal of CEO Laurent Freixe.
- US-listed shares of Nio (NIO) rose 1.6% in premarket trading on Tuesday after the Chinese electric vehicle maker reduced its adjusted net loss amid fierce competition in China
- PepsiCo (PEP) stock jumped 5% in premarket trading on Tuesday after the Wall Street Journal reported that activist investor Elliott Investment Management built a $4 billion stake in the company.
- Kraft Heinz (KHC) is splitting into two companies a decade after a massive merger created one of the biggest food giants in the world.
- Gold pushes past record high of $3500, buoyed by rate-cut speculation
- Following the jewelry retailer’s second-quarter results exceeding Wall Street’s expectations, Signet Jewelers’ shares increased by over 5% in the premarket on Tuesday.
Source : Yohoo finance
