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US Stocks Fall Amid Tariff Concerns
US stocks closed lower on Tuesday, September 2, as investors assessed the latest developments on the trade front, kicking off a seasonally weak month for stocks. Rising bond yields also raised investor concerns.
The Dow Jones Industrial Average fell 249 points, or about 0.6%. The S&P 500 fell 0.7%, and the Nasdaq Composite fell 0.8%.
Investors took profits from the bull market as the summer season unofficially came to an end. Nvidia shares fell 2%, while other major tech companies, such as Amazon and Apple, each fell 1%.
These moves come after a US federal appeals court ruled on Friday that most of the global tariffs imposed by US President Donald Trump are unlawful. The US Court of Appeals for the Federal Circuit ruled that only Congress has the authority to impose sweeping tariffs. Trump described the decision as "extremely biased" and said he would appeal the ruling to the U.S. Supreme Court.
Investors were also anticipating a rise in bond yields at the start of September. The yield on the 10-year U.S. Treasury note jumped to 4.27%, while the yield on the 30-year note surpassed 4.97%.
Bond investors pushed yields higher on the prospect of the United States having to pay back billions in tariffs, further exacerbating the country's already strained fiscal position.
These developments could weigh on investor sentiment as a new trading month begins. Historically, September is the worst month of the year for stocks, with the S&P 500 index falling 4.2% on average over the past five years and more than 2% on average over the past ten years.
"There's no doubt that the 5% yield on the 30-year Treasury is a significant headwind," Ross Mayfield, investment strategist at Baird Private Wealth Management, told CNBC. "I think it will continue to be a thorn in the side of stocks that are trading at somewhat overvalued valuations."
