New York (awp/afp) – The New York Stock Exchange closed sharply down on Tuesday, shaken by profit-taking and renewed nervousness among investors, worried about the global economy.
The Nasdaq index fell 3.26%, while the Dow Jones lost 1.51% and the broader S&P 500 index 2.12%.
“The September blues hit Wall Street today,” Jose Torres of Interactive Brokers commented in a note.
September is traditionally a bad month for stocks, which have finished negative over this period for the past four years.
“It was a risk-off session,” said Sam Burns, chief investment strategist at Mill Street Research.
The VIX index, which measures investor sentiment, soared 33%.
The first victim of this tension is the microprocessor industry, boosted by the craze for generative artificial intelligence (AI) for almost two years.
The superstar of the sector, Nvidia, tumbled by 9.53%. On Tuesday alone, the flagship of Santa Clara (California) wiped out nearly 280 billion of market capitalization, more than the total valuation of Toyota, Hermès or Pepsico.
“There is this impression that these companies have reported good results, but not enough to meet expectations,” Burns suggested.
“I think it’s mostly profit-taking and portfolio rebalancing,” the analyst said. “I don’t see this session as a harbinger of a bigger correction.”
Apple (-2.72%) and Alphabet (-3.94%), which had made a nice recovery since the beginning of August, were also caught up in the selling current.
Wall Street has also been caught up in fears of a deterioration in the economy, in light of mixed indicators in China in recent days, as well as figures from the United States.
Activity in the manufacturing sector in the United States thus remained in contraction in August, according to the ISM purchasing managers’ organization. It progressed compared to July but less than expected.
And according to this ISM report, new orders fell to their lowest level since May 2023.
The renewed tension that hit the New York market benefited bonds.
The yield on 10-year US government bonds fell to 3.84%, compared to 3.90% at the close on Friday (Monday was a holiday in the United States). Bond rates move in the opposite direction to their prices.
Wall Street is already awaiting the publication of the monthly report on American employment on Friday, the last before the meeting of the American central bank (Fed).
A bad number would be a “significant setback” for the market, warned Art Hogan of B. Riley Wealth Management. “That would make it two bad reports (after July’s) in a row and raise concerns about the trajectory of the economy and the labor market.”
On the stock market, volatility benefited so-called defensive stocks, i.e. those theoretically less sensitive to the economic situation, such as Coca-Cola (+0.75%), health insurer UnitedHealth (+1.44%), the Dow Jones’ top weighting (9% of the index) and cable operator Verizon (+2.75%).
Boeing made a forced landing (-7.32%), with investors worried about the approach of the expiration date of the company agreement between the manufacturer and the International Association of Machinists and Aerospace Workers union, on September 12.
In the absence of a compromise, nearly 32,000 members of the union organization could go on strike by then.
Boeing also suffered from a downgrade in its recommendation from Wells Fargo analysts, who highlighted the group’s difficulties in generating positive cash flow.
US Steel (-6.09%) was penalized by the statements of the Democratic presidential candidate Kamala Harris, who affirmed on Monday that she wanted to keep the steelmaker under American control.
US President Joe Biden had already said on several occasions that he wanted to block the takeover of US Steel by Japanese firm Nippon Steel, announced last December but suspended due to lack of authorisation from regulators.
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