Stocks plunge ahead of U.S.-China trade talks.
The U.S. stock market declined sharply on Tuesday, as investors shifted their focus to upcoming trade negotiations between the United States and China set to begin later this week.
All of Wall Street’s major indices reported heavy losses Tuesday, with the Dow Jones Industrial Average (NYSEARCA:DIA) plunging triple digits. The blue-chip index fell 313.98 points, or 1.2%, to close at 26,164.04.
The broad S&P 500 Index (NYSEARCA:SPY) of large-cap stocks declined 1.6% to close at 2,893.06. All 11 primary sectors reported losses, with financials leading the pack. Health care, energy, information technology and materials each fell by at least 1%.
The technology-focused Nasdaq Composite Index (NYSEARCA:QQQ) declined 1.7% to settle at 7,23.78.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) rose sharply on Tuesday. The so-called “fear index” reached a session high of 20.19 on a scale of 1-100 where 20 represents the historic average. VIX eventually settled up 12.8% at 20.14.
In economic data, Caixin China’s services purchasing managers’ index (PMI) weakened unexpectedly last month, signaling a broad downturn in the world’s second-largest economy. The gauge of services activity fell to 51.3 in September from 52.1 in August. Analysts in a median estimate were calling for an increase to 52.9.
In the United States, the Labor Department’s producer price index fell 0.3% in September, which translated into a year-over-year gain of 1.4%.
The Final Word: U.S.-China trade talks are set to resume in a few days. Chinese negotiators have narrowed the scope of the upcoming talks, making a comprehensive trade agreement highly unlikely this week.