Wall Street stocks fell on Tuesday as traders returning from a long weekend saw oil prices hit a more than one-year high and new data showed China’s economy is still struggling to recover.
The S&P 500 (^GSPC) fell 0.4%, while the Dow Jones Industrial Average (^DJI) fell around 0.6%. The tech-heavy Nasdaq Composite ( ^IXIC ) ended slightly lower than the flat line, reversing earlier losses.
The three major benchmarks were coming off a winning week that saw the S&P 500 book its best weekly performance since June, as a stream of economic reforms prompted the Federal Reserve to refrain from hiking interest rates at its September meeting.
Data on Tuesday showed that China’s services activity fell to an eight-month low in August, reviving worries about a recovery in the world’s second-largest economy and what that means for global demand.
Meanwhile, WTI crude oil (CL=F) ended the day near $87 a barrel, its highest close since November 2022.
Amid the recession debate, Goldman Sachs analysts cut their chances of a U.S. recession, citing rising inflation and a still resilient labor market. Additionally, they played down the idea that a prolonged drag on the Fed’s rate hike campaign would push the economy into a deep recession.
With mild earnings and the focus ahead of the economic calendar likely to remain on the Fed this week, investors looking at current forces in stocks may find few reasons to cheer. September is historically a bad month for marketing.
That said, some analysts believe September may not be as bad as expected, pointing to factors such as excitement around AI, cash on the sidelines and the release of Apple’s new iPhone.
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