Stocks Plummet as Crude Prices Soar and China's Economy Slows

The stock market settled lower on Tuesday, with major indexes hitting six-week lows. The S&P 500 Index fell by -0.45%, while the Dow Jones Industrial Average dropped by -0.63%. The Nasdaq 100 Index declined by -0.65%.

Elevated crude oil prices are putting upward pressure on inflation expectations, pushing bond yields higher worldwide. Crude prices surged more than +4% on Tuesday, with October WTI crude oil prices (CLV26) reaching a new 3.75-month high. The 10-year T-note yield rose to a 19-year high of 5.039%, and the 10-year German Bund yield climbed to a 17-year high of 3.573%.

Weak economic news from China added to market jitters. August retail sales rose +0.4% year-over-year, lower than expected, while the surveyed jobless rate unexpectedly rose +0.1 to 5.3%. However, industrial production rose +5.2% year-over-year, beating expectations.

Cryptocurrency-exposed stocks took a hit on Tuesday as Bitcoin fell more than -4%, with Coinbase Global (COIN) and Galaxy Digital Holdings (GLXY) leading the decline among S&P 500 constituents. Chipmakers and AI-infrastructure stocks recovered some of Monday's losses, but their gains were not enough to offset broader market declines.