Wall Street Close: NASDAQ in official correction territory, S&P 500 extends Thur's decline
|- The Dow Jones Industrial Average fell 632.42 points, or 2.25%
- The S&P 500 lost 95.12 points, or 2.78%, to 3,331.84.
- The Nasdaq Composite dropped 465.44 points, or 4.11%.
US benchmarks ended lower for a third straight session on Tuesday, with Nasdaq falling 4.1% and officially confirming a correction.
Technology dragged down the market as it extended a rout that started on Thursday, while Tesla suffering its biggest daily percentage drop after the stock was passed over for inclusion in the S&P 500.
In fact, each of the 11 major S&P sectors were lower, led by declines in technology and energy.
Reports on Friday that SoftBank 9984 made significant option purchases during the run-up in U.S. stocks added to investor nervousness as well as heightened geopolitical risks following a flare-up in tensions between the US and China again.
How did the benchmarks perform?
Consequently, the Dow Jones Industrial Average lost 632.42 points, or 2.25%, to 27,500.89, the S&P 500 dropped 95.12 points, or 2.78%, to 3,331.84 and the Nasdaq Composite fell 465.44 points, or 4.11%, to 10,847.69.
Tuesday's close marked a 3-day decline of more than 10% for Nasdaq and its biggest 3-session tumble since March 18. The S&P 500 SPX ended the session 7% below its latest record, reached on September 2nd.
Reuters reported that some of Nasdaq's biggest drags on Tuesday were high flying stocks such as Apple AAPL, down 6.7%, Microsoft MSFT, down 5.4% and Tesla Inc TSLA, down 21% in a record daily percentage decline for the stock.
Tesla, which has now fallen around 34% so far this month, was slammed on Tuesday after the electric-car maker was excluded from a group of companies being added to the S&P500.
Relationships between China/US soured
Meanwhile, the US and Sine trade spat just took a turn for the worst. Analysts at ANZ bank explained:
Getting tough on China is the stance being taken by both Trump and Biden as part of their political campaigns. Trump has stated “we are going to end our reliance on China” having stated the US will start manufacturing its own medical supplies in order to reduce its reliance on China.
Trump has also indicated he plans to impose hefty tariffs on Chinese imports if he is re-elected.
Chinese journalists in the US have had visas cut to 90 days and Chinese authorities have imposed similar restrictions on US journalists working in China. Meanwhile two Australian journalists have rapidly exited China after questioning by Chinese authorities.
S&P 500 levels
As per the start of the week's forecast and bearish chart (below), the downside is playing out:
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(The S&P 500 Weekly Forecast: More downside left to play for, target 61.8% Fib)
Current weekly chart:
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