A slump in the market: concerns about Brexit, manufacturing weakness, stocks dive on China

On Tuesday, the S&P 500 fell by 0.69%. The Dow Jones industrials were dropped by 1.08%. The Nasdaq Composite fell 1.1%. On Monday, due to labor day, the U.S financial markets were closed. There were several reasons for the crash. The main reason was the trade war with China. The 15% tariffs imposition on some Chinese goods and imposition of tariffs on U.S.-made imports were the reasons that drove the slump. For the first time in three years, a weak report from the ISM on U.S. manufacturing movement dowing tightening in the sector.

Political chaos in the UK causes concerns as it may affect European and British economies. Prime Minister Boris Johnson lost a vote after the close of trading, that permits tomorrow for the argument for a no-deal Brexit. According to the Washington Post report on Tuesday, around 30 states are preparing to join an internet giant’s antitrust probe. Also, Google shares were dropped by about 1.7%. There were also new worries about Boeing’s 737 Max airliner. Boeing (NYSE:BA) fell 2.66%. The Boeing was the weediest Dow performer. Dow lost 286 points, out of which 66 points were of Boeing. The investors survived the volatility by investing in treasury and gold securities. Gold futures rose from $26.50 to $1,555.90 in New York futures trading. Metal is expected to move higher.

Some of the Dow stocks such as Procter & Gamble, Coca-Cola, and Walmart showed a rise. These are classic protective stocks. Overall, the averages are still lower than their peaks of Autumn 2018. The averages are suggesting that there are some resistance forces which could limit the gains. U.S. and China trade fight is fueling the resistance. Volatility in the political situation in Europe is another factor aiding the resistance. Furthermore, Latin America’s economic uncertainty is helping the slump in the market. On Wednesday, the market may perceive some pressure from Tyson Foods. Due to commodity-price volatility Tyson Foods cut full-year guidance in part. This movement affected the shares and dropped it by 6.2% only after some hours.