WASHINGTON (dpa-AFX) - After initially showing a significant move to the downside, stocks regained some ground over the course of the trading day on Tuesday but remained firmly negative. The major averages all moved notably lower, extending the pullback seen during last Friday's session.
The tech-heavy Nasdaq slumped 175.92 points or 0.8 percent to 21,279.63 but had tumbled by as much as 1.5 percent in early trading. The S&P 500 slid 44.72 points or 0.7 percent to 6,415.54, while the Dow fell 249.07 points or 0.6 percent to 42,295.81.
The early sell-off on Wall Street came amid renewed trade uncertainty after the U.S. Court of Appeals for the Federal Circuit ruled most of President Donald Trump's global tariffs are illegal.
In a 7-4 decision, the appeals court ruled that the power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution.
However, the court delayed implementation of its order until October, giving the Trump administration time to appeal the decision to the Supreme Court.
'All tariffs are still in effect!' Trump said in a post on Truth Social. 'If these tariffs ever went away, it would a total disaster for our country.'
Treasury yields surged in reaction to the ruling amid concerns the government may have to repay the billions of dollars already brought in through Trump's tariffs.
In U.S. economic news, the Institute for Supply Management released a report showing a slight increase by its reading on U.S. manufacturing activity in the month of August, although the index still indicated the sixth consecutive month of contraction.
While the ISM said its manufacturing PMI inched up to 48.7 in August after falling to a nine-month low of 48.0 in July, a reading below 50 still indicates contraction. The uptick matched economist estimates.
Sector News
Steel stocks showed a significant move to the downside on the day, dragging the NYSE Arca Steel Index down by 1.7 percent.
Considerable weakness was also visible among commercial real estate stocks, as reflected by the 1.7 percent loss posted by the Dow Jones U.S. Real Estate Index.
Telecom, semiconductor and banking stocks also saw notable weakness, while gold and biotechnology stocks showed strong moves to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.3 percent, while China's Shanghai Composite Index fell by 0.5 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index plunged by 2.3 percent, the U.K.'s FTSE 100 Index slumped by 0.9 percent and the French CAC 40 Index slid by 0.7 percent.
In the bond market, treasuries climbed off their worst levels of the day after an early slump but remained firmly negative. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 5.0 basis points to 4.277 percent.
Looking Ahead
Reports on factory orders and job openings may attract some attention on Wednesday along with the Federal Reserve's Beige Book.
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