Wall Street tumbles, yen rises, oil price drops below $70, VIX rises as traders brace for volatile month: What will shape markets on Tuesday?

The first trading session of September began with a broad sell-off in risky assets as traders took a cautious approach ahead of what has historically been a volatile month for global markets.

At 1 p.m. in New York, the S&P 500 was down 1.6%, while small-cap stocks were down 2.7%. The Magnificent Seven, followed by the Roundhill Magnificent Seven ETF (NYSE:MAGS) failed to provide a safe haven, falling 2.3%.

The CBOE Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” rose 20%, reflecting increased investor anxiety.

Technology stocks took a beating, with the Nasdaq 100 falling 2.5% and on track for its biggest one-day drop since Aug. 1.

Tuesday’s sell-off was reminiscent of the market turbulence caused by the unwinding of the yen-dollar carry trade earlier in the summer. This time, the yen rose 0.8% against the dollar after hawkish comments from the Bank of Japan governor Kazuo Ueda at night.

Despite the yen’s strength, the US dollar rose 0.2% against a basket of other currencies, supported by broader market movements.

On the economic front, U.S. manufacturing figures for August showed a bigger-than-expected contraction, while the employment index pointed to mounting challenges ahead of a crucial jobs report due later this week.

Treasury yields fell as weak manufacturing data fueled speculation about possible rate cuts by the Federal Reserve. The yield on the two-year Treasury note, which is sensitive to policy changes, fell 3 basis points, while the yield on the 10-year Treasury note fell 7 basis points. iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) rose 1.2%.

In commodities, gold prices fell 0.5%, while oil prices fell more than 4%, the biggest one-day drop since October 2023. West Texas Intermediate (WTI) crude oil prices fell to levels not seen since early January 2024, amid concerns about weaker demand and expectations of increased supply from OPEC next month.

Cryptocurrency markets were also under pressure, with Bitcoin (CRYPTO: BTC) fell 2.5% as overall sentiment remained weak.

Tuesday’s performance in major US indices and ETFs

Main indices	Price	1-day change (%)
Dow Jones	41,057.56	-1.2%
S&P 500	5,557.61	-1.6%
Nasdaq 100	19,102.46	-2.4%
Russel 2000	2,160.05	-2.7%
CBOE-VIX	18.54	19.2%

Updated at 1:15pm ET

According to Benzinga Pro data:

The SPDR S&P 500 ETF Confidence (NYSE:SPY) fell 1.5% to $555.15.
The SPDR Dow Jones Industrial Average (NYSE:DIA) fell 1.1% to $411.80.
The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) fell 2.4% to $45.16.
The iShares Russell 2000 ETF (NYSE:IWM) fell 2.6% to $214.30.
The Consumer Staples Select Sector SPDR Fund (NYSE:XLP) outperformed, rising 1%, while the Technology Select Sector SPDR Fund (NYSE:XLK) fell 3.5%.

Stock prices on Monday

Among the mega-cap stocks, Nvidia Corp. (NASDAQ:NVDA) fell 7.6%, its biggest one-day drop since April.
Other major chip makers also went bankrupt, including Marvell Technologies Inc. (NASDAQ:MRVL), down 7.3%, Micron Technology (NASDAQ:MU), down 6.5%, Advanced Micro Devices Inc.. (NASDAQ:AMD), down 6%, and Taiwan Semiconductor manufacturing company (NYSE:TSM), down 5.7%.
Intel Corp. (NASDAQ:INTC) fell 7.5% after news broke that the stock might be removed from the Dow Jones index.
Boeing company (NYSE:BA) fell nearly 8% after Wells Fargo downgraded the stock to an Underweight rating and slashed its price target.

Read more: Stock of the Day: Berkshire Hathaway Trading Above Usual Range — Is It Time to Sell Warren Buffett Stock?

Bear market illustration generated using artificial intelligence via Dall-E.

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This article Wall Street Crashes, Yen Rises, Oil Falls Below $70, VIX Soars as Traders Brace for Volatile Month: What’s Driving Markets Tuesday? originally appeared on Benzinga.com