A rally on Wall Street went bust on Tuesday and stocks ended with deep losses as concerns about China’s economy outweighed lower valuations that some earlier saw as bargains.
In a dramatic session, major indices turned negative in the final minutes of trading after previously climbing almost 3%.
Investors remained worried that a slowdown in China could hobble global growth, even after the country’s central bank cut interest rates on Tuesday for the second time in two months. The move came after Chinese stocks slumped 8% on Tuesday, on top of an 8.5% drop on Monday.
Investors are still concerned about exogenous growth and shifting Fed policy, and both of those are still on the table.
–Mark Luschini, chief investment strategist, Janney Montgomery Scott
Tuesday’s drop followed steeper losses on Monday, when the Dow Jones industrial average slid more than 1,000 points at its lows and the benchmark S&P 500 recorded its worst day since 2011.
Earlier, the S&P rose as much 2.9%, the Dow as much as 2.8% and the Nasdaq as much as 3.6%.
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