Tech and Energy Stocks Tumble: On Tuesday, U.S. stock exchanges went down drastically as main indexes dropped significantly. S&P 500 lost 2.12%, Dow Jones Industrial Average plunged by 1.51%, while NASDAQ 100 recorded the steepest drop of 3.15%. Such decline was unprecedented in two weeks’ history for S&P 500 and in two and half weeks for NASDAQ 100, thus showing how hard it was to sell off.
The Big Picture: Major Indices Take a Hit
| Index | Close Value | Percentage Change | Timeframe Low |
| S&P 500 ($SPX) | 4,444.14 | -2.12% | 2-week low |
| Dow Jones ($DOWI) | 34,567.87 | -1.51% | 2-week low |
| Nasdaq 100 ($IUXX) | 14,872.95 | -3.15% | 2.5-week low |
The S&P 500 fell by 2.12%, while the Dow Jones lost 1.51%, and the Nasdaq 100 saw the steepest decline at 3.15%. These indices hit their lowest levels in weeks, reflecting widespread market distress.
Sector Breakdown: Tech and Energy Stocks Take the Brunt
The stock market’s declines on Tuesday were notably attributed to the plunge in chip stocks. Specifically, ON Semiconductor, Intel and Nvidia saw their stock prices fall by over 9%, dragging down the whole market. Other semiconductor firms like Marvell Technology and Micron Technology also faced steep declines exceeding 8%. This weakness within the sector emphasised the market’s high reliance on the technology industry, which has been one of the main contributing factors to growth in recent years.
Moreover, with mistakenly low crude oil prices plunging by more than 3% to eight-month lows, there were other energy stocks, leading to despair in it. Shares that had been listed within this category such as Devon Energy, Schlumberger and ConocoPhillips dropped more than 3%. It serves as evidence of how prone the industry is to changeable prices for oil. Losses in energy shares merely compounded existing pressures on a precarious market.
| Company | Stock Price Change |
| ON Semiconductor (ON) | -9.25% |
| Intel (INTC) | -9.12% |
| Nvidia (NVDA) | -9.05% |
| Marvell Technology (MRVL) | -8.65% |
| Micron Technology (MU) | -8.35% |
Chart: Chipmaker Stock Performance on Tuesday
Energy Sector Stumbles Amid Crude Oil Crash
The energy sector was another major loser, as crude oil prices dropped over 3% to an eight-month low. This slump hit energy stocks hard:
| Company | Stock Price Change |
| Devon Energy (DVN) | -3.85% |
| Schlumberger (SLB) | -3.67% |
| ConocoPhillips (COP) | -3.45% |
| Exxon Mobil (XOM) | -2.95% |
| Marathon Oil (MRO) | -2.72% |
Chart: Crude Oil Price vs. Energy Stocks Performance
Economic Data: The Catalyst for Market Volatility
The market’s decline was aggravated by weak-than-expected negative economic numbers. For U.S. ISM, the Manufacturing Index in August was 47.2 which is lower than the expected score of 47.5 indicating that the manufacturing sector continues to shrink. Similarly, in July unexpectedly construction spending for the U.S decreased by 0.3% marking its worst fall within almost two years. The lousy data raised fears about slowing down economies thus destroying investors’ trust further.
| Economic Indicator | Actual Value | Expected Value | Significance |
| U.S. ISM Manufacturing Index (Aug) | 47.2 | 47.5 | Indicates ongoing contraction in manufacturing. |
| U.S. Construction Spending (Jul) | -0.3% | +0.1% | Largest decline in nearly two years. |
| China Manufacturing PMI (Aug) | 49.1 | 49.5 | Lowest level in six months, indicating slowdown. |
Chart: Key Economic Indicators vs. Market Reaction
Global Concerns: China’s Economic Woes Weigh Heavily
Concerns about global expansion, especially in China, contributed significantly to Tuesday’s collapse. In August, China’s manufacturing PMI dropped to 49.1, a six-month low that has raised worry about the health of the world’s second largest economy. The surprise decline sparked fears that slowing down of China’s economy will likely block global growth prospects and bring about more confusion in the market.
Table: Global Market Performance on September 3rd, 2024
| Region | Index | Performance |
| Europe (Euro Stoxx 50) | 4,200.78 | -1.22% |
| China (Shanghai Composite) | 3,098.46 | -0.29% |
| Japan (Nikkei 225) | 32,914.23 | -0.04% |
Global markets followed suit, with key indices in Europe and Asia also closing lower, reflecting widespread concerns about economic growth.
Bond Market: A Flight to Safety
Therefore, a jump in safe-haven demand was witnessed for U.S. Treasury bonds because of the turbulence experienced in the stock market. Amidst the equity market collapse, this was reflected by a fall of 6.6 basis points in the yield of 10-year Treasury notes to show 3.837% yield are safe havens for an investor’s wealth rather than losing through stock assets hence even lower inflation expectations have caused lowering of bond yields especially with crude oil prices drastically falling.
Table: U.S. and European Government Bond Yields
| Bond Type | Yield (Sept 3, 2024) | Yield Change (bps) |
| U.S. 10-Year Treasury | 3.837% | -6.6 |
| German 10-Year Bund | 2.277% | -6.1 |
| UK 10-Year Gilt | 3.990% | -6.5 |
Defensive Stocks Provide Some Respite
Even with the massive market slump, defensive consumer durable stocks held dearly to their gains. Investors have thus sought shelter in safer, more stable sectors and helped companies such as Molson Coors Beverage and Campbell Soup increase their stock prices. This is evidence that the market has changed emphasis from growth to safety due to rising economic uncertainty.
What’s Next? Market Outlook and Key Data to Watch
Coming up next, the US economic data that we will be able to get will most likely have an impact on the course that the market takes. This includes things like the ISM services index and the monthly payroll report. It is believed that this will help in providing more information about how the US economy is and whether or not this will have an effect on the interest rate decisions of The Federal Reserve.
Currently, financial markets are pricing a 100% probability for a 25 basis point reduction in rates at Fed’s September meeting alongside a 38 percent probability of 50 basis points cut in interest rates. These expectations highlight a situation where there is anticipation for further monetary easing by market players to spur economic growth.
Conclusion:
The stock market drop experienced on Tuesday serves as a striking reminder of the instability and interconnectedness prevalent in contemporary global financial markets. As shocks in value brought about by poor metrics affected technology and energy shares’ prices, investors are left with more questions than answers. To survive such difficult conditions, it is critical for investors to pay close attention to the forthcoming economic reports as well as stock market changes.
Disclaimer: The information in this “Stock Profile” blog post is for informational purposes only. It is not financial advice. Always consult a qualified expert before making investment decisions.
