Stocks retreated on Monday after weak U.S. manufacturing data raised concerns about the strength of the economy. Banks, industrials and other stocks that rely on economic growth led the decline.
The Dow Jones Industrial Average fell 400 points, or about 1%, with Caterpillar and Goldman Sachs falling the most. The S&P 500 fell 0.6% and the Nasdaq fell 0.2%
The U.S. manufacturing industry showed signs of slowing down, with the ISM manufacturing index in May reaching 48.7, causing Treasury yields to fall. Readings below 50 indicate contraction.
Wall Street is coming off a strong month, with all three major stock indexes notching their sixth monthly gain in seven months. The Nasdaq rose 6.9% in May, its best month since November 2023.
However, the rally appeared to be running out of steam towards the end of the month. although Dow Chemical It rose more than 500 points on Friday. The Nasdaq fell 1.1% last week, with chip stocks including Nvidiastumbled.
Nvidia Monday’s recovery came despite losses in other parts of the market. The artificial intelligence darling’s shares rose 2% after announcing a new set of artificial intelligence chips, just three months behind the previous model.
“With technicals remaining tight, little fear and sentiment looking positive, we maintain our view,” Chris Senyek, chief investment strategist at Wolfe Research, wrote on Monday. Volatility will pick up in the summer.
The first week of June is filled with more economic updates. Investors await ADP private payrolls data on Thursday, followed by the May jobs report on Friday. Investors seem to be hoping for a certain degree of economic slowdown, which would give the Federal Reserve the green light to cut interest rates, but the slowdown cannot be too severe, otherwise it will raise concerns about an economic recession.
Technical issues on the New York Stock Exchange affected quotes for several stocks early Monday, but trading returned to normal around noon.
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