Wall Street Slumps on Weak Manufacturing Data

As trading resumed after the Labor Day holiday, Wall Street's main indexes opened the new month with a sharp selloff, reinforcing September's reputation as the worst month for the stock market.

New economic data reignited fears about the economy's health after U.S. manufacturing data—a key economic driver—disappointed in August, missing the forecast of 47.5 and coming in at 47.2, slightly above July’s 46.8.

Meanwhile, Wall Street’s fear gauge, the CBOE Volatility Index (VIX), which measures market expectations of stock market swings, surged 33.25% to 20.72.

This represented the biggest daily percentage gain and the highest close since early August.

With a slew of economic data due this week, including the monthly jobs report, investors will closely monitor the figures ahead of the Federal Reserve’s next interest rate decision on September 18.

Odds of a 25-basis-point interest rate cut remain high, while some on Wall Street call for a larger 50-basis-point reduction.

The U.S. government is set to release the latest jobs report on Friday, which is expected to show an increase of 164,000 jobs in August, compared to 114,000 jobs added in July.

Preliminary data from the New York Stock Exchange (NYSE) show the Dow Jones Industrial Average fell 626.15 points, or 1.51%, to 40,936.93.

The Standard & Poor's 500 Index dropped 119.47 points, or 2.12%, to 5,528.93, while the rich-tech Nasdaq Composite plummeted 577.33 points, or 3.26%, to 17,136.30.

The so-called 'Magnificent Seven' mega-cap tech stocks showed weaker performance, led by Nvidia, which plummeted 9.5% following concerns about slowing growth highlighted in the chipmaker's recent results.

Alphabet fell 3.9%, and Tesla decreased by 1.6% after announcing plans to produce a six-seat variant of its Model Y in China starting in late 2025.

Amazon was down 1.3%, Meta (formerly Facebook) saw a 1.8% drop, Microsoft declined by 1.9%, and Apple experienced a 2.7% fall.

In the U.S. government bond markets, the yield on the 10-year Treasury, which influences mortgage rates and other economy-influencing loans, settled at 3.83%.

The policy-sensitive two-year yield, which closely tracks Federal Reserve interest rate adjustment expectations, closed at 3.87%.

Bitcoin, the largest digital currency, kicked off the new month weaker, dropping to an intraday low of US$57,595 and posting an intraday high of US$59,799 before closing at US$58,016 in New York.

With Bitcoin closing below US$58,350, there is potential for a reversal of the current bullish sentiment, shifting focus to downside targets with initial support at US$54,600 and further support at US$48,000.

However, further assessment is needed to confirm this bearish outlook.

Meanwhile, if we see a bounce in the next 24 hours, the next major target of US$71,500 will present a significant challenge, potentially extending the rally towards the upper target range of US$78,000 to US$81,000.

Effective risk management and adaptable strategies are essential for navigating market volatility and seizing potential opportunities.

Ethereum mirrored Bitcoin's volatility, trading between US$2,437 and US$2,551 and closing at US$2,454.

To restore its bullish momentum and target US$4,000 despite recent volatility, Ethereum must close above US$2,870.

Clearing this level is critical for sustaining the bullish outlook and making further gains.

Support is now seen at around US$1,950–US$1,980; reassessment at this level is suggested.

Given the high volatility, traders should remain cautious, monitor prices closely, and apply effective risk management and adaptable strategies to navigate the market and capitalise on potential opportunities.

Precious metal prices remained volatile, with Spot Gold extending its losses and tumbling to US$2,492, while silver closed at US$28.05.

Oil prices fell sharply on Tuesday in the energy sector, turning negative year-to-date, as weak data from China and the U.S. manufacturing sector raised concerns about slowing energy demand.

Brent crude, the global benchmark, fell to $73.70, while the U.S. benchmark, West Texas Intermediate, closed at $69.70.

Meanwhile, the U.S. Dollar Index (DXY) holds steady at 101.75.

Meanwhile, the Eurodollar was 1.1044, and the British pound finished at 1.3110. The Japanese yen ended lower at 145.46, and the Australian dollar was at 0.6710.

---

This content is provided by Australian Financial Services Corporation (AFSC) Pty Ltd (AFSC), trading as Crystal Ball Finance. AFSC is a corporate authorised representative (CAR No. 001275455) of ShareX Pty Ltd (AFSL No. 519872).

For information relating to our financial services, you should refer to our Financial Services Guide.

Crystal Ball Finance content is designed as the opinion only and is general in nature. It does not take account of your objectives, financial situation or needs. Nothing in this content shall be construed as a solicitation to buy or sell any security or product or to engage in or refrain from engaging in any transaction. There are risks involved in any financial investment and trading strategy, and the value of any investment can and does fluctuate and may even become valueless. You should consider the appropriateness of any investment or trading strategy having regard to your circumstances. We recommend that you obtain financial, legal and taxation advice before making any financial investment decision or applying any trading strategy. This content is based on information obtained from sources believed to be reliable, but we do not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. Crystal Ball Finance does not accept any liability whatsoever for any direct, indirect, consequential or other loss arising from any use or application of its content.