Wall Street opened September with notable declines on Tuesday as investor sentiment was shaken by a federal appeals court decision that invalidated most of the broad tariffs implemented during Donald Trump’s presidency. The ruling has sparked uncertainty over future trade policy and its implications for government revenue and international trade relationships.
The Dow Jones Industrial Average dropped 249.07 points, representing a 0.55% decline, closing at 45,295.81. The S&P 500 fell 44.72 points, or 0.69%, to finish at 6,415.54, while the Nasdaq Composite lost 175.92 points, a 0.82% decrease, ending the session at 21,279.63.
Market volatility increased following the decision, especially after the Labor Day break, with the Cboe Volatility Index (.VIX), often referred to as Wall Street’s fear gauge, showing an upward trend. Despite this, indexes managed to recover slightly from their intraday lows.
Oliver Pursche, senior vice president and adviser at Wealthspire Advisors in Westport, Connecticut, noted that the ruling raises concerns about whether the former administration’s trade actions may have damaged relationships with key partners while also eliminating a source of tariff income. However, he cautioned against interpreting the current market movement as the start of a major downturn, pointing out that August and September historically tend to be more turbulent before the typically stronger fourth quarter.
Long-term Treasury yields rose to their highest levels since mid-July, contributing to a 1.7% drop in the real estate sector, one of the weakest performers among S&P 500 industry groups.
Kraft Heinz (KHC.O) shares declined by 7% after announcing plans to separate into two independent entities—one focused on packaged foods and the other on condiments and spreads. In contrast, PepsiCo (PEP.O) saw its stock rise 1.1% after activist investor Elliott Management revealed a $4 billion stake and intentions to push for strategic changes.
Trading volume across U.S. exchanges reached 16.41 billion shares, slightly above the 20-day average of 16.26 billion. On the Nasdaq, losing stocks outnumbered gainers by nearly 2-to-1, while on the NYSE, the ratio was approximately 2.4-to-1.
Market participants are now turning attention to the upcoming U.S. jobs report, scheduled for release on Friday, which could provide further insight into labor market trends amid concerns about slowing employment growth in August.
Meanwhile, futures markets indicate a 92% probability of a 25-basis-point rate cut by the Federal Reserve at the conclusion of its September 17 policy meeting, according to data from CME Group’s FedWatch tool.
— news from Reuters
— News Original —
Wall Street ends lower as ruling on Trump tariffs raises concerns
Summary n nCompanies n nPepsiCo gains after Elliott discloses $4 billion stake n nKraft Heinz shares fall n nUS jobs report due on Friday n nIndexes: Dow down 0.6%, S&P 500 down 0.7%, Nasdaq down 0.8% n nNEW YORK, Sept 2 (Reuters) – Wall Street started off September on a sharply lower note on Tuesday as investors weighed the future of President Donald Trump ‘s tariffs after a federal appeals court ruled most of his sweeping tariffs illegal. n nA divided U.S. appeals court made the ruling on n nSign up here. n nThe appeals court ruling rattled investors after the long Labor Day holiday weekend, with September traditionally a weak month for equities. The Cboe Volatility Index (.VIX), opens new tab – Wall Street ‘s fear gauge – rose, but the major stock indexes ended off their worst levels of the day. n nWith the ruling, “the question becomes, ‘Has the Trump administration alienated our trading partners as well as given up the revenue from tariffs? ‘ That ‘s what ‘s plaguing markets,” said Oliver Pursche, senior vice president and adviser for Wealthspire Advisors in Westport, Connecticut. n n”By the same token, it ‘s too early to call this the beginning of a great correction,” he said. “At the end of the day, we all know that August-September tend to be more volatile and a little more challenging for investors before we get into the fourth quarter, which tends to be a pretty solid one.” n nData going back decades shows that, on average, September is the worst month for U.S. stocks, and some investors are bracing for another bumpy ride this year. n nIn addition, investors are anxious to see the monthly U.S. payrolls report, due on Friday, and whether weak U.S. job growth continued for a fourth month in August. n nThe Dow Jones Industrial Average (.DJI), opens new tab fell 249.07 points, or 0.55%, to 45,295.81, the S&P 500 (.SPX), opens new tab fell 44.72 points, or 0.69%, to 6,415.54 and the Nasdaq Composite (.IXIC), opens new tab fell 175.92 points, or 0.82%, to 21,279.63. n nU.S. rate futures widely expect the Federal Reserve to lower interest rates this month, pricing in a 92% chance of a 25-basis-point cut at the end of its two-day policy meeting on September 17, according to CME Group ‘s FedWatch. n nReal estate (.SPLRCR), opens new tab fell 1.7% and had among the biggest S&P 500 sector declines on the day, with U.S. 30-year Treasury yields on Tuesday climbing to their highest levels since mid-July. n nAlso, shares of Kraft Heinz (KHC.O), opens new tab dropped 7% after the company said it will split into two companies, one focused on groceries and the other on sauces and spreads. n nOn the flip side, shares of PepsiCo (PEP.O), opens new tab gained 1.1% after Elliott Management disclosed a $4 billion stake in the beverages company, launching an activist campaign. n nOn the Nasdaq, 1,555 stocks rose and 3,099 fell as declining issues outnumbered advancers by about a 1.99-to-1 ratio There were 105 new highs and 118 new lows. n nOn the NYSE declining issues outnumbered advancing ones by a 2.4-to-1 ratio . There were 176 new highs and 53 new lows. n nVolume on U.S. exchanges was 16.41 billion shares, compared with the 16.26 billion average for the full session over the last 20 trading days. n nReporting by Caroline Valetkevitch in New York; Additional reporting by Purvi Agarwal and Ragini Mathur in Bengaluru; Editing by Pooja Desai, Maju Samuel and Matthew Lewis