Stocks finished lower Tuesday amid a disappointing data report and ongoing trade tensions. Hopes for September trade talks between the U.S. and China have faded after the latest round of tariffs from both sides were implemented on Sunday. The Dow dropped 285 points, while the S&P 500 lost 0.7%. The Nasdaq Composite was down 1.1%.
Weak economic data pressured risk sentiment after the Institute for Supply Management’s manufacturing gauge fell into contractionary territory in August for the first time in three years. A separate flash reading from research firm IHS Markit showed manufacturing PMI expanded to 50.3 last month after contracting for the first time in a decade. Overseas, political uncertainty surrounding Britain’s exit from the European Union also weighed on risk appetite. Treasuries advanced, with the yield on the 10-year note down three basis points to 1.47% after touching a three-year low of 1.43%. In commodities, WTI crude pared an earlier decline to close down 2.1% to $53.97/barrel amid demand concerns. COMEX gold rallied 1.6% to $1,547.10/ounce.
Eight of 11 S&P 500 sectors finished in negative territory with the more traditionally defensive Utilities, Real Estate, and Consumer Staples groups bucking the downtrend. Industrials led decliners, sliding 1.4%, while Technology and Financial shares also lost more than 1%. In corporate news, Boeing shed 2.7% after The Wall Street Journal reported fresh delays in returning the 737-MAX aircraft to service. Amazon gained 0.8% following an analyst price target increase.