The Dow Jones fell more than 400 points, on track for its biggest one-day decline since March

New York
CNN
—

Shares fell on Tuesday after that A series of economic data raised concerns about the cloudy outlook for the US economy and interest rate hikes by the Federal Reserve.

The S&P 500 fell 1.6%, heading for its lowest closing level since June. The Dow Jones Industrial Average fell 425 points, or 1.3%, its biggest one-day drop since March. The Nasdaq Composite lost 1.7%.

The S&P 500 now sits below the threshold it crossed to enter bull market territory earlier this summer, representing a more than 20% rise from its low last October.

Housing data released Tuesday morning showed that new home sales fell 8.7% in August from July, as mortgage rates rose above 7% to their highest levels in decades.

Meanwhile, US home prices rose to a record high in July, recording increases for the sixth straight month as a tight supply of homes continues to push prices higher, according to the latest Case-Shiller Home Price Index.

“The Fed will see the reacceleration of home prices as a reason to keep interest rates higher for longer,” said Bill Adams, chief economist at Comerica Bank. “The Fed cannot ignore the impact of housing prices on the cost of living.”

Investors were on edge Since the Fed indicated last week They could raise interest rates again this year and delay interest rate cuts longer than expected. This has sent yields rising to their highest level in decades, as investors recalibrate their expectations of how long interest rates will remain high.

CNN’s Fear and Greed Index, which uses seven market indicators, fell to a “fear” reading of 27, just above “extreme fear.” This marks the lowest level for the index since March, when the collapse of regional lenders Silicon Valley Bank and Signature Bank sent financial markets into turmoil.

Oil prices rose on Tuesday after paring recent gains earlier. West Texas Intermediate crude futures, the US standard, rose to nearly $90 a barrel. The price of Brent crude, the international standard, rose to $94 per barrel.

JPMorgan Chase CEO Jamie Dimon he said Tuesday in an interview With the Times of India reporting that he is preparing the bank’s clients for a 7% interest rate scenario, raising concerns among investors.

The possibility of a government shutdown also looms on Wall Street with the end of the fiscal year on September 30 quickly approaching without any spending agreement..

Moody’s warned on Monday that such an event would occur It may be negative for America’s credit ratingwhich already saw a downgrade from Fitch earlier this year after the federal government narrowly avoided breaching the debt ceiling.