WASHINGTON (dpa-AFX) - Stocks regained some ground after an early sell-off but still ended Tuesday's trading significantly lower. The major averages added to the notable losses posted during Monday's session, once again falling to their lowest closing levels in a month.
The major averages all finished the day firmly in negative territory. The Dow slumped 498.50 points or 1.1 percent to 46,091.74, the Nasdaq tumbled 275.23 points or 1.2 percent to 22,432.85 and the S&P 500 slid 55.09 points or 0.8 percent to 6,617.32.
Weakness among technology stocks continued to weigh on Wall Street amid an extended decline by market leader and AI darling Nvidia (NVDA).
Shares of Nvidia tumbled by 2.8 percent after slumping by 1.8 percent on Monday as traders look ahead to the release of the chipmaker's quarterly results after the close of trading on Wednesday.
The strength of Nvidia's results and its guidance could have a significant impact on the markets amid recent concerns about an AI bubble.
'As fears over an AI bubble build, there has rarely been more riding on an individual set of results than Nvidia's on Wednesday,' said AJ Bell investment director Russ Mould. 'Even a mild disappointment could reinforce the market's worries and spark a wider sell-off.'
Speaking to BBC News, Alphabet (GOOGL) CEO Sundar Pichai said there has been some 'irrationality' in the current AI boom and warned 'no company is going to be immune' if the AI bubble were to burst.
Traders are also looking ahead to the release of some U.S. economic data that was delayed by the government shutdown, including the September jobs report on Thursday.
On the U.S. economic front, the Commerce Department released a report showing a significant rebound by new orders for U.S. manufactured goods in the month of August.
The report said factory orders jumped by 1.4 percent in August after tumbling by 1.3 percent in July. The rebound was in line with economist estimates.
Sector News
Computer hardware stocks turned in some of the market's worst performances on the day, with the NYSE Arca Computer Hardware Index plunging by 3.7 percent.
Semiconductor and software stocks also saw substantial weakness, contributing to the steep drop by the tech-heavy Nasdaq.
Outside of the tech sector, considerable weakness was visible among retail stocks, as reflected by the 2.4 percent slumped by the Dow Jones U.S. Retail Index.
Home Depot (HD) helped lead the retail sector lower, tumbling by 6.0 percent after reporting weaker than expected third quarter earnings and cutting its full-year earnings guidance.
On the other hand, oil stocks bucked the downtrend amid a sharp increase by the price of crude oil, driving the NYSE Arca Oil Index up by 1.4 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Tuesday. Japan's Nikkei 225 Index plummeted by 3.2 percent, while Hong Kong's Hang Seng Index dove by 1.7 percent.
The major European markets also showed significant moves to the downside on the day. While the French CAC 40 Index plunged by 1.9 percent, the German DAX Index tumbled by 1.8 percent and the U.K.'s FTSE 100 Index slumped by 1.3 percent.
In the bond market, treasuries gave back ground after an early advance but still closed slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down 1.0 basis point to 4.123 percent after hitting a low of 4.085 percent.
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