New sales shook everything Wall Street in today’s session, with the Dow Jones falling nearly 500 points amid concerns about the trajectory of the US economy.
O Dow fell 494.82 points or 1.21% to finish at 40,347.97 points. At the session lows, it lost 744.22 points or 1.8%.
O S&P 500 fell 1.37% and ended at 5,446.68 points, while Nasdaq plunged 2.3% to 17,194.15 units. The Russell 2000 index of small-cap stocks also fell 3%. In addition, the VIX index, which tracks volatility, jumped to its highest level since April.
Some new data have fueled concerns about a possible recession, including views that the Federal Reserve may be taking too long to start cutting interest rates. Jobless claims data showed the biggest increase since August 2023, while the U.S. manufacturing index, a barometer of manufacturing activity, stood at 46.8, a sign of a serious economic slowdown. Following the data, the yield on the U.S. 10-year bond fell below 4% for the first time since February.
The data came a day after the Fed opted to keep interest rates steady at the highest level in two decades, even as Chairman Jerome Powell opened the door to a rate cut soon, possibly at its September meeting.
Analysts say today’s data points to an economic slowdown amid intense volatility. “The market doesn’t know whether to laugh or cry because with three rate cuts on the horizon and 10-year Treasury yields falling below 4%, the winds of recession are starting to pick up,” said Chris Rapkey, chief economist at FWDBONDS.
The stocks that could suffer in such a scenario are those that recorded the biggest losses in today’s session, including JPMorgan Chase, which recorded losses of 2.3% and Boeing, which fell more than 6%.
However, shares opened the session higher, with Meta Platforms up 4.8% on better-than-expected second-quarter results.
Even big tech companies like Nvidia felt the pain, with the leading artificial intelligence chip company reporting losses of 6.7%.
However, the S&P 500 is up 14% this year, with July marking the eighth month of gains in the last nine.