NEW YORK (AP) — U.S. stocks took a downturn on Tuesday as investors prepare for a week filled with significant economic reports that could indicate the health of the economy.
As of early trading, the S&P 500 was down 0.7%, following a strong week that had nearly pushed it to its all-time high. The Dow Jones Industrial Average dropped 167 points, or 0.4%, from its record set on Friday before the long Labor Day weekend. Meanwhile, the Nasdaq Composite experienced a sharper decline, falling 1.1% as of 9:35 a.m. Eastern time.
In the bond market, Treasury yields also fell, reflecting investor caution ahead of a key report on U.S. manufacturing due later in the morning. The manufacturing sector has been particularly hard-hit by high interest rates and has been contracting for most of the past two years.
Concerns about a slowing U.S. economy contributed to a significant stock market decline last month, but financial markets have since rebounded, buoyed by hopes that the Federal Reserve could manage a “soft landing” for the economy. After raising its main interest rate to a two-decade high to combat inflation, the Fed is widely expected to ease rates later this month in an effort to avoid tipping the economy into a recession.
Additional reports expected later this week could provide further insight into the economy’s condition. These include updates on the number of job openings as of the end of July and data on the growth of U.S. services businesses in August. The most anticipated report of the week is due on Friday, which will reveal how many jobs were created by U.S. employers during August.
On Wall Street, U.S. Steel saw its stock fall by 4.2% following comments from Vice President Kamala Harris. Speaking to a crowd in Pennsylvania on Monday, Harris expressed her opposition to U.S. Steel’s planned sale to Japan’s Nippon Steel Corp. Her stance aligns with that of President Joe Biden. Nippon Steel had announced last week that it would invest an additional $1.3 billion to upgrade facilities in Pennsylvania and Indiana, supplementing a previous $1.4 billion commitment. Despite political and labor opposition, Nippon Steel reiterated that it expects the deal to close in the second half of 2024.
Nvidia was the biggest drag on the S&P 500, with its stock dropping 4.8%. Despite the chipmaker surpassing high expectations in its latest earnings report, Nvidia’s stock has struggled, fueling criticism that its valuation, along with those of other Big Tech companies, may have soared too high amid the hype around artificial intelligence.
In the bond market, the yield on the 10-year Treasury note fell to 3.84% from 3.91% late Friday, a notable decline from the 4.70% peak seen in late April.
Internationally, stock indexes across Europe and Asia showed modest declines. Concerns about China’s economic resilience also grew after recent data painted a mixed picture. Weak earnings from Chinese companies, including property developer New World Development Co., added to the pessimism surrounding the world’s second-largest economy.