The first trading session of September began with a widespread sell-off in risky assets as traders adopted a cautious stance ahead of what has been a historically 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, pursued by the Roundhill Magnificent Seven ETF (NYSE:MAGS) did not offer a safe haven, losing 2.3%.

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

Technology stocks were hit hard: The Nasdaq 100 lost 2.5 percent and is on track for its biggest daily loss since August 1.

Tuesday’s sell-off was reminiscent of the market turmoil sparked by the unwinding of the yen-dollar carry trade over the summer, with the yen rising 0.8% against the dollar this time following sharp comments from the Bank of Japan governor. Kazuo Ueda overnight.

Despite the strength of the yen, the U.S. dollar rose 0.2 percent against a basket of other currencies, supported by broader market movements.

On the economic front, US manufacturing data for August showed a larger-than-expected decline and the employment index pointed to growing challenges ahead of a key jobs report due later in the week.

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

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

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

Performance of the most important US indices and ETFs on Tuesday

Updated at 1:15 p.m. ET

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust (NYSE:SPY) fell 1.5% to $555.15.

• The SPDR Dow Jones Industrial Average (NYSE:DIA) fell 1.1% to $411.80.

• The technology-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) beat expectations with a gain of 1%, while the Technology Selection Sector SPDR Fund (NYSE:XLK) fell 3.5%.

The story continues

The stockbrokers of Monday

• Among the mega-cap stocks Nvidia Corp. (NASDAQ:NVDA) fell 7.6%, marking its worst daily decline since April.

• Other major chip manufacturers also experienced a crash, 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 manufacturers (NYSE:TSM), -5.7%.

• Intel Corp. (NASDAQ:INTC) fell 7.5% after news that the stock may be removed from the Dow Jones Industrial Average.

• Boeing Company (NYSE:BA) fell nearly 8% after Wells Fargo downgraded the stock to Underweight and sharply reduced its price target.

Read more: Stock of the day: Berkshire Hathaway is trading above the usual range – time to sell Warren Buffett shares?

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

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This article “Wall Street tumbles, yen rises, oil dips below $70, VIX rises as traders prepare for a volatile month: What’s driving markets on Tuesday?” originally appeared on Benzinga.com

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