Stocks tumble on tariffs, weak data

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The Dow Jones Industrial Average lost 1.1% to 26,118.02. The entire back and forth has now unsurprisingly dented US stock markets as The Dow, S&P 500 and Nasdaq have begun bleeding.

"Sentiment was already poor to start the day and then the weaker-than-expected manufacturing data just added fuel to the fire", said Dave Mazza, managing director and head of product at asset management firm Direxion in NY. -China trade turbulence, but trade remains the most significant issue, indicated by the strong contraction in new export orders, Timothy Fiore, the Chair of the ISM Manufacturing Business Survey Committee said. Apple, which relies on China as a key part of its supply chain, fell 1.5%, while chipmakers Nvidia dropped 2% and Qualcomm slid 3.4%.

The S&P 500 dropped 20.19 points, or 0.7%, to 2,906.27. The Dow and the S&P 500 snapped a three-day winning streak. The Nasdaq Composite also lost nearly as much percentage weight, at 1.1%, eventually hitting 7,874.16.

The S&P 500 index fell 1.8% in August, its biggest monthly drop since May, after escalating trade tensions and the inversion of a key part of the USA yield curve, seen as a sign of recession, drove investors toward safe-haven assets.

Industrial stocks were among the biggest decliners.

The only sectors that gained ground were utilities, rising 1.8%, real estate, climbing 1.3% and consumer staples, which closed the session up 0.5%. (MU) fell 1.9% and 1.3%, respectively.

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The United States levied a 15% extra on an estimated $110 billion worth of Chinese products in a forceful move which has come to be characteristic of the U.S. Caterpillar, which is seen as an industry bellwether when it comes to the impact of trade, fell 2.7%.

Benchmark crude oil fell $1.16 to settle at $53.94 a barrel.

The Institute for Supply Management, an association of purchasing managers, said Tuesday that its manufacturing index slid to 49.1 last month, from 51.2 in July. Brent crude, used to price worldwide oils, gained 22 cents to $58.48 per barrel in London. The ICE U.S. Dollar Index, a measure of the U.S. currency against a basket of six major rivals, rose less than 0.1%. Businesses are more wary of investing and expanding because of uncertainty surrounding the U.S.

August marked the first time in three years that the manufacturing sector shrank. A level below 50 indicates that activity at America's factories contracted. "The current chaos around the United Kingdom exiting the European Union threatens to push down sterling even further unless we get a clear idea of what is happening and when", Russ Mould, investment director at AJ Bell, said in a note to investors Tuesday. The yield on the 10-year Treasury fell to 1.44 per cent from 1.50 per cent late Friday. The 10-year note yield declined to 1.47%.

European stocks fell broadly and the British pound dropped to its lowest level against the USA dollar in 34 years, excluding a brief "flash crash" in 2016 that may have been caused by technical glitches, as the United Kingdom faces a potentially chaotic exit from the European Union. British lawmakers on Tuesday triggered a vote that could allow them to stop Boris Johnson pursuing a "no-deal" Brexit, a challenge that the government warned would prompt the prime minister to seek an election on October 14.

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