Best Investment Manager's Take: U.S. Stocks Slump at Start of Historically Worst Month
In a rocky start to September, U.S. stocks slumped on Tuesday, with the benchmark indices on track for their biggest daily declines since early August. Market sentiment took a hit as data from the Institute for Supply Management showed that U.S. manufacturing remained subdued, despite a slight improvement from July.
September is historically known as one of the worst months for stock market performance, dating back to the 1950s. Seasonality plays a big role in this, especially after a strong performance earlier in the year.
Eight out of 11 S&P sectors fell, with technology, energy, communication services, and industrial stocks leading the decline. The megacap technology stocks, which have been driving this year's rally, also saw losses.
As of 3 p.m. ET, the Dow fell 615.24 points, the S&P 500 lost 111.04 points, and the Nasdaq dropped 534.82 points. Traders are keeping an eye on labor market reports ahead of Friday's non-farm payrolls data for August, as well as the Federal Reserve's upcoming meeting.
Odds of a 25-basis point interest rate cut are at 63%, while chances for a bigger 50 bps reduction stand at 37%. Tesla fell 1.5% after reports of plans to produce a six-seat variant of its Model Y car in China, while Boeing lost 7.7% after a downgrade from Wells Fargo.
In conclusion, the current market conditions suggest a challenging month ahead, with potential interest rate cuts and economic data influencing investor sentiment. It's crucial for investors to stay informed and adapt their strategies accordingly to navigate through these turbulent times.
