US markets end deeply in red on Tuesday

04 Sep 2024 Evaluate

The US markets ended deeply in red on Tuesday with Nasdaq settling over 3 percent cut as technology names struggled and new economic data rekindled fears around the health of the economy. 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. Sentiment were weak after the Institute for Supply Management (ISM) released a report showing a continued contraction by U.S. manufacturing activity in the month of August. The ISM said its manufacturing PMI inched up to 47.2 in August from 46.8 in July, but a reading below 50 still indicates contraction. Street had expected the index to rise to 47.5. The data led to renewed concerns about the economic outlook, which contributed to the sell-off seen in early August.

On the sectoral front, semiconductor stocks pulled back sharply after turning in a strong performance last Friday, resulting in a 7.8 percent nosedive by the Philadelphia Semiconductor Index. AI darling and market leader Nvidia (NVDA) plummeted by 9.5 percent. Substantial weakness was also visible among steel stocks, as reflected by the 5.1 percent plunge by the NYSE Arca Steel Index. U.S. Steel (X) helped lead the sector lower, tumbling by 6.1 percent after Vice President Kamala Harris expressed opposition to the sale of the steel producer to Japan's Nippon Steel. Gold, computer hardware and housing stocks also showed notable moves to the downside, while interest rate-sensitive utilities stocks were among the few groups to buck the downtrend.

Dow Jones Industrial Average fell 626.15 points or 1.51 percent to 40,936.93, Nasdaq dropped 577.33 points or 3.26 percent to 17,136.3 and S&P 500 was down by 119.47 points or 2.12 percent to 5,528.93.