The first trading session of September kicked off with a widespread selloff across risk assets, sending a chill through Wall Street as traders braced for what is historically a turbulent month for global markets.
By 1 p.m. in New York, the S&P 500 had plummeted 1.6%, while small-cap stocks nosedived 2.7%. Even the so-called ‘Magnificent Seven’, a group of tech giants tracked by the Roundhill Magnificent Seven ETF (MAGS), offered no safe haven, sinking 2.3%. The CBOE Volatility Index (VIX), often dubbed Wall Street’s ‘fear gauge’, skyrocketed 20%, reflecting heightened anxiety among investors.
Tech stocks were particularly hard hit, with the Nasdaq 100 shedding 2.5%, on track for its worst single-day drop since August 1. Tuesday’s selloff bore a resemblance to the market turmoil caused by the unwinding of the yen-dollar carry trade earlier in the summer. This time, the yen surged 0.8% against the dollar, fueled by hawkish comments from Bank of Japan Governor Kazuo Ueda overnight.
Despite the yen’s strength, the U.S. dollar gained 0.2% against a basket of other currencies, buoyed by broader market movements.
On the economic front, U.S. manufacturing data for August revealed a deeper-than-expected contraction, with the employment index signaling mounting challenges ahead of a crucial jobs report due later in the week.
The weak manufacturing data triggered speculation about potential interest rate cuts by the Federal Reserve, driving Treasury yields lower. The yield on the two-year Treasury note, sensitive to policy changes, dipped 3 basis points, while the 10-year Treasury note yield dropped 7 basis points. The iShares 20+ Year Treasury Bond ETF (TLT) climbed 1.2%.
In the commodity markets, gold prices slipped 0.5%, while oil prices took a nosedive, plunging over 4% – the steepest one-day decline since October 2023. West Texas Intermediate (WTI) crude oil fell to levels not seen since early January 2024, driven by concerns over weaker demand and expectations of increased OPEC supply next month.
Cryptocurrency markets also faced pressure, with Bitcoin (BTC/USD) down 2.5% as overall sentiment remained weak.
Tuesday’s Performance in Major US Indices and ETFs:
| Major Indices | Price | 1-day change (%) |
| ————— | ————— | —————– |
| Dow Jones | 41,057.56 | -1.2% |
| S&P 500 | 5,557.61 | -1.6% |
| Nasdaq 100 | 19,102.46 | -2.4% |
| Russell 2000 | 2,160.05 | -2.7% |
| CBOE VIX | 18.54 | 19.2% |
According to Benzinga Pro data:
* The SPDR S&P 500 ETF Trust (SPY) was down 1.5% to $555.15.
* The SPDR Dow Jones Industrial Average (DIA) fell 1.1% to $411.80.
* The tech-heavy Invesco QQQ Trust Series (QQQ) tumbled 2.4% to $45.16.
* The iShares Russell 2000 ETF (IWM) sunk 2.6% to $214.30.
* The Consumer Staples Select Sector SPDR Fund (XLP) outperformed, up by 1%, while the Technology Select Sector SPDR Fund (XLK) tumbled 3.5%.
Monday’s Stock Movers:
Among mega-cap stocks, Nvidia Corp. (NVDA) plummeted 7.6%, marking the worst single-day drop since April. Other major chipmakers also tanked, including:
* Marvell Technologies Inc. (MRVL), down 7.3%
* Micron Technology (MU), down 6.5%
* Advanced Micro Devices Inc. (AMD), down 6%
* Taiwan Semiconductor Manufacturing Company (TSM), down 5.7%
Intel Corp. (INTC) fell 7.5% amid news that the stock might be removed from the Dow Jones index.
Boeing Company (BA) tumbled almost 8% after Wells Fargo downgraded the stock to an Underweight rating and slashed its price target.
