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Dow slides more than 300 points, breaking a 3-day win streak, as bank names tumble: Live updates

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Stocks fell Tuesday as concern over the state of the global economy — China in particular — and a decline in U.S. banks combined to pressure Wall Street.

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The Dow Jones Industrial Average slid 361.24 points, or 1.02%, ending at 34,946.39 and breaking a three-day positive streak. The S&P 500 pulled back by 1.16%, closing at 4,437.86 and ending the session below its 50-day moving average — a move that may signal the beginning of a downtrend. The Nasdaq Composite fell 1.14% to 13,631.05.

Financial stocks in the U.S. weakened Tuesday. Shares of JPMorgan Chase and Wells Fargo dropped 2%, and Bank of America dropped 3%. The action came after Fitch warned it may have to downgrade credit rating dozens of banks, including JPMorgan Chase. Last week, Moody's lowered its rating on 10 U.S. banks while putting other big institutions on a watchlist for potential downgrades.

Regional banks also traded lower Tuesday, with the SPDR S&P Regional Banking ETF (KBE) trading down about 3%. Shares fell after Minneapolis Federal Reserve President Neel Kashkari spoke in favor of "significantly further" capital regulation.

"Right now it seems like things are quite stable," Kashkari said in a Tuesday town hall meeting. "The risk is that if inflation is not completely under control, and that we have to raise rates further from here, to bring it down, that they might face more losses than they currently face today. And these pressures could flare up again in the future."

Investor sentiment also weakened globally after China reported disappointing economic data and its central bank made a surprise rate cut.

Industrial production in China increased by 3.7% in July from the year-earlier period, missing expectations. Retail sales also grew less than expected, and the People's Bank of China lowered interest rates by 15 basis points to 2.5% from 2.65%. But that failed to soothe investor concerns and instead only heightened concern about China's struggling real estate market.

"The China trade this year has been about trying to front run government policy and government stimulus, [but] at some point, you just stop believing" that policymakers will succeed at boosting economic growth, said Scott Ladner, chief investment officer at Horizon Investments.

"It seems like that's sort of the conclusion the market is beginning to come to yet again, for probably the third time this year, that the Chinese government is unlikely to stimulate in a way that's meaningful," Ladner added.

A packed earnings week for the largest retailers kicked into gear Tuesday. Home Depot reported earnings per share and revenue that beat analyst expectations, pushing its stock slightly higher. Later in the week, traders will parse releases from Target and Walmart.

On the data front, July's U.S. retail sales data came in higher than expected, indicating a stronger-than-expected consumer. Retail sales increased 0.7% on a month-over-month basis. Meanwhile, economists had estimated a 0.4% increase, according to Dow Jones.

Stocks close in negative territory

All three major averages ended Tuesday's trading session in the red.

The Dow Jones Industrial Average declined 361.24 points, or 1.02%.

Meanwhile, the S&P 500 and the Nasdaq Composite fell 1.16% and 1.14%, respectively.

The broad market index closed below its 50-day moving average for the first time since March 28.

— Hakyung Kim

Brent falls back into negative territory for 2023

Brent futures settled down by 1.53% at $84.89 on Tuesday after making a comeback in recent trading sessions. The commodity hit a low of $84.29, the lowest level since August 8, when Brent traded as low as $83.32.

Year to date, brent futures have declined by 1.19%.

— Hakyung Kim

Viking Global cuts big tech bets in second quarter

Ole Andreas Halvorsen's Viking Global cut bets on tech giant Amazon in the second-quarter and fully divested investments in Block, according to a 13F filing.

The firm also lowered its stake in Facebook-parent company Meta, while opening a new position in Netflix and adding to UPS bets.

CNBC Pro subscribers can read the full story here.

— Brian Evans

A majority of S&P 500 stocks are trading in negative territory

The selloff Tuesday was broad-based, with 442 S&P 500 names last trading in negative territory. Among the biggest laggards were Discover Financial Services, First Solar and PayPal.

Meanwhile, there were just 61 gainers in the S&P 500. The broader index was led by D.R. Horton and Paramount Global.

— Sarah Min

GDP on track for 5% growth in Q3, Atlanta Fed indicator shows

Rather than slowing into recession, the U.S. economy is actually gaining significant steam in the third quarter, according to the latest projections from the Atlanta Federal Reserve.

Following an update Tuesday, the Fed district's GDPNow tracker of incoming data is pointing to growth of 5% for the July-through-September period. That's up from the previous estimate of 4.1% a week ago. Should it hold, that would be the fastest growth since the fourth quarter of 2021.

The upward revision followed retail sales data from the Commerce Department showing that spending grew 0.4% in July, pushing the estimate for personal consumption expenditures growth to 4.4% from 3.2%. Consumer spending accounts for about one-third of all U.S. economic activity.

—Jeff Cox

China will try to boost demand for real estate development again, investor says

Western investors should take a wait-and-see approach on China until it tries again to boost real estate development, according to Rhys Williams, chief strategist at Spouting Rock Asset Management.

Investor concern over China's beleaguered real estate market was heightened after a Bloomberg report over the weekend said Zhongrong International Trust delayed payment of maturing wealth products to clients.

Williams said the concerns are warranted, but he expects the Chinese government will eventually try to ease pressure on the sector by raising incentives and issuing more debt to increase liquidity. However, he advised traders to carefully monitor the situation until then.

"We do expect that the Chinese return to the historical playbook of increasing incentives for real estate development and issuing more debt to try and create liquidity and boost demand," Williams said. "For Western investors, we put the Chinese property sector in the 'too hard' category, and suggest watching from the sidelines, while rooting for China's success."

"The worse the near-term news stories about the local economy in China, the greater the pressure to do something dramatic stimulus-wise. However, we recommend watchful waiting," Williams added.

— Sarah Min

Vietnamese EV manufacturer VinFast soars 160% on debut via SPAC merger

VinFast, a Vietnamese electric vehicle company, popped after it made its debut on the Nasdaq on Tuesday.

The company has just wrapped its merger with Black Spade Acquisition, a U.S.-listed special purpose acquisition company. SPACs aim to raise capital through an initial public offering. Afterward, they use those proceeds to merge with a private company and debut it on the public markets, typically within two years.

SPACs were hot during 2020 and 2021, but interest cooled significantly in 2022 as equity markets cratered and investors went into risk-off mode. VinFast's debut comes as IPO activity has begun to heat up, with companies like Savers Value Village and Cava emerging in 2023.

Shares of VinFast leapt more than 160% as of 2 p.m. ET. Read more about the company's debut here.

-Darla Mercado, John Rosevear

The U.S. banking sector is sound, according to The Wealth Alliance

Despites renewed fears of trouble in the financial sector after Fitch Ratings said it may be forced to downgraded banks — including giants such as JPMorgan Chase — bank stocks are in a "comfortable space," said Eric Diton, president and managing director at The Wealth Alliance.

"The good news is that the [Federal Reserve] ran its stress test not that long ago, and the big banks passed that fed stress test," said Diton.

"The issue is that during the previous administration, there was lobbying that that allowed some of those regulations on the smaller banks [and] regional banks to be pulled back. And so that's how, I think, we ended up with some of the issues that we saw more recently with Silicon Valley and First Republic," Diton added.

The managing director sees the gap between lower rates and maturity of treasury bonds on the banks' balance sheets as the issue, rather than bad lending.

"The issue isn't bad. ... Bottom line, I think that the U.S. bank system is overall sound," said Diton.

"All Fitch was saying was: 'If we did downgrade the sector again, that would lead us to have to downgrade a lot of the individual banks,'" he added. "Maybe they will, maybe they won't."

— Hakyung Kim

Campbell Soup Company, Moderna among stocks hitting fresh lows

Campbell Soup Company and Conagra Brands are among stocks hitting fresh lows. The food manufacturers lost 1.3% and 1.4%, respectively, reaching lows not seen since March 2022. Moderna also edged 3.2% lower on Tuesday, hitting its lowest level since November 2020.

These stocks also hit notable lows on Tuesday:

Here are some of the companies that made 52-week or all-time highs, on the other hand:

— Pia Singh, Chris Hayes

Strong retail sales data shows 'rolling' recession could be more likely, investing pro says

Strong July retail sales data highlights the increased likelihood of a "rolling" recession, according to Jamie Cox, managing partner for Harris Financial Group.

Tuesday's data showed monthly growth that was greater than economists expected, a sign of continued strength in the consumer despite concerns about the state of the economy. This data can signal specific sectors may enter a recessionary phase at different times, as opposed to the entire U.S. economy moving into a downturn at once, he said.

"The probability of a broad based recession continues to decline, giving way to the more likely scenario of a sector based rolling recession," Cox said, adding that U.S. consumers "continue to impress."

And that would be a "huge win" for the Federal Reserve as it attempts to get inflation down without "breaking the economy."

— Alex Harring

Amgen bucks Dow's slide

Amgen has been able to sidestep the downturn seen across the Dow in Tuesday's session.

While the blue-chip index has fallen nearly 1%, Amgen shares have climbed 1.5%. It's one of three of the 30 stocks in the index trading up in the session and is the only one more than 1% higher.

The rally isn't new for the biotechnology stock. Shares have climbed more than 13% since August began, making it the best performing stock in the index on a month-to-date basis as well. The Dow, by comparison, has dropped 1.6% on the month.

Amgen beat analyst expectations earlier this month on both lines when reporting second-quarter earnings. The company also raised its full-year expectations for both earnings per share and revenue.

— Alex Harring

Yelp faces A.I.-related risks, Morgan Stanley says

Morgan Stanley sees some critical artificial intelligence-fueled risks ahead for Yelp, and its advertising business.

"In our view, YELP will likely face competitive challenges longer term, as more scaled platforms have greater capacity to invest in increasingly sophisticated AI offerings," wrote analyst Matthew Cost in a Tuesday note to clients.

The firm anticipates some advertising difficulties ahead for Yelp as behemoths launch more sophisticated tools such as chatbots, and improve both user engagement and return on investment.

"Ultimately, we see YELP facing significant challenges over the long term, as it does not have the same scaled data set, distribution channels or capacity to invest relative to the larger players in the ecosystem, and we also see YELP facing ongoing engagement concerns," Cost wrote.

The analyst retained his underweight rating on shares, lifting his price target to $32. The new objective represents about 26% downside from Monday's close.

— Samantha Subin

Stocks making the biggest moves midday

Check out the companies making headlines in midday trading.

  • Banks — Major Wall Street banks slid during midday trading after CNBC reported Tuesday that Fitch Ratings may once again downgrade the health of the banking sector. Shares of Bank of America and JPMorgan Chase slid 2%, while Citigroup and Morgan Stanley each fell more than 1%. Regional banks also slid, with Citizens Financial Group falling more than 3%.
  • Cleveland-Cliffs — Shares of the steel company shed 2.7% as investors weighed the latest developments in potential consolidation in the industry. Cleveland-Cliffs' stock jumped more than 8% on Monday after U.S. Steel announced that it was rejecting a takeover offer from its rival. Industrial conglomerate Esmark announced its own offer for U.S. Steel on Monday.
  • Discover Financial Services — Shares of the credit card issuer dropped 9% after the company announced late Monday that president and CEO Roger Hochschild will step down and John Owen will take over in the interim. The changes take effect immediately.

Read the full list here.

— Sarah Min

KeyBanc thinks newly-public Israeli beauty stock is underappreciated in healthcare technology

Investors are overlooking Oddity Tech, which is poised to become a leader in the growing digital beauty and wellness market, according to KeyBanc.

"We see ODD in the early stages of its growth story, with near-term tailwinds from its ongoing disruption of beauty and wellness end markets but longer-term growth opportunities that can be unlocked given its unique, differentiated technology," Analyst Scott Schoenhaus wrote in a Monday note. 

Oddity's use of its "nascent hyperspectral technology" and a company-owned biotechnology asset — both powered by AI — will lead to novel beauty and wellness treatments, KeyBanc said.

Shares are trading down more than 5% on Tuesday. Oddity went public in July at $35 a share in an IPO.

CNBC Pro subscribers can read more here.

— Pia Singh

UBS hikes Nvidia price target ahead of earnings, sees more than 20% upside

Now is the time for investors to get more bullish on Nvidia, according to UBS.

Analyst Timothy Arcuri maintained his buy rating on the stock and raised his estimates ahead of Nvidia's second-quarter earnings due next week.

"Investor expectations for F2025 (C2024) EPS have risen substantially, but we recommend investors stay the course here and remain bullish amid the recent pullback in the stock over the past month," Arcuri wrote in a Monday note. "Demand will dictate NVDA's long-term AI revenue opportunity, but supply should be the primary determinant for its data center revenue at least through C2024."

The chipmaker's share price is trading 1.8% higher Tuesday.

CNBC Pro subscribers can read more here.

— Pia Singh

Morgan Stanley says this under-the-radar biotech stock can rally more than 80%

Investors should look to Pharvaris for sizable gains, according to Morgan Stanley.

"We believe Pharvaris is positioned to deliver the first oral therapy for the on-demand treatment of hereditary angioedema (HAE) supported by positive Ph2 RAPIDe-1 data (here) and the FDA lifting their clinical hold," Analyst Maxwell Skor wrote in a Tuesday note. "We see a viable market opportunity with ondemand and short-term prophylactic treatment."

Pharvaris is a clinical-stage company developing B2-receptor antagonist oral therapies, like deucrictibant, to treat and prevent hereditary angioedema attacks.

Shares are up 12.6% in Tuesday's trading session.

CNBC Pro subscribers can read more here.

— Pia Singh

S&P 500 sectors all down Tuesday

All sectors in the broad market index are in the red as of Tuesday morning.

The energy and the financials sectors are the biggest laggards. The Energy Select Sector SPDR Fund and the Financial Select Sector SDPR Fund have fallen 1.7% and 1.4%, respectively.

Valero Energy and APA are down nearly 3%, leading the energy sector's pullback.

Discover Financial Services is the biggest loser in the financial sector, down 9%. Comerica and KeyCorp also declined more than 4%.

— Hakyung Kim

Bright spots in July's retail sales report, says Bankrate

Online shopping was a bright spot in the July retail sales report, according to Bankrate senior industry analyst Ted Rossman.

Sales by 'nonstore retailers' increased 10.3% year-over-year, Rossman noted.

"This is a signal that Amazon Prime Day and competitors' promotions resonated with consumers. The only category that posted a larger year-over-year increase was bar and restaurant sales, which continue to benefit from a post-pandemic surge in spending on experiences such as dining, travel and attending concerts and sporting events," said Rossman.

— Hakyung Kim

Buffett gives a 'vote of confidence' to homebuilders, Evercore ISI says

Warren Buffett's new bets on several homebuilders, including D. R. Horton, could highlight the strong fundamentals of the industry from investors who usually overlook those stocks, according to Evercore ISI.

Analyst Stephen Kim pointed out in a note to clients that Berkshire Hathaway already owns prive homebuilder Clayton Properties Group, which means the additional buys could be a sign of broad confidence in the space.

"We believe builders that pursue an asset-light approach could eventually be revalued higher, as the market rewards their through-cycle returns and low leverage. In that light, we regard this investment by BRK as a helpful vote of confidence in a potential revaluation of the large-cap homebuilders," Kim wrote.

— Jesse Pound

Stocks open lower Tuesday

U.S. stocks began Tuesday's trading session lower.

The Dow Jones Industrial Average declined 125 points, or 0.3%. The S&P 500 and the Nasdaq Composite also shed 0.4% and 0.3%, respectively.

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— Hakyung Kim

Copper hits lowest price in more than two months

Copper reached a low not seen in more than two months on Tuesday.

The metal fell as low as $3.656. That's the lowest its traded at since June 1, when it fell as low as $3.654.

— Alex Harring, Gina Francolla

Retail sales exceed expectations

Retail sales data for July came in higher than expected in a sign of continued consumer strength.

The indicator of food service and retail sales grew by 0.7% in July from last month. Economists polled by Dow Jones anticipated a relatively modest 0.4% month-over-month increase.

Excluding automotives, sales grew by 1%. That notably exceeded economists' forecast of 0.4%.

— Alex Harring

Empire State manufacturing index slumps

Manufacturing activity in the New York area plunged during August, though the outlook for business conditions improved considerably.

The New York Fed's Empire State Manufacturing Survey index tumbled to -19, representing the percentage of businesses reporting expansion against contraction. That was about 20 points below July's reading and well below the Dow Jones estimate for -1.4.

Sharp declines in new orders and shipments helped ring down the number, while the prices paid and received indexes each gained more than 8 points.

Conversely, the index for future business conditions, a six-month outlook, rose to 19.9, a gain of 6 points, as the slump in new orders and shipments is expected to reverse and "employment is expected to grow considerably," the New York Fed said.

—Jeff Cox

Stocks making the biggest moves premarket

D. R. Horton — Shares of the homebuilder rose 2.2% in premarket trading after a securities filing revealed that Warren Buffett's Berkshire Hathaway has added a stake in D. R. Horton worth more than $700 million.

Hannon Armstrong Sustainable Infrastructure Capital — The renewable energy investment firm climbed 2.1% after Bank of America upgraded shares to buy. The firm said that Hannon Armstrong would likely benefit from Inflation Reduction Act tailwinds.

Phillips 66 — The Texas-based energy stock fell 2% after a downgrade from Bank of America over a lower risk-reward skew.

Read the full list here.

— Brian Evans

Bank stocks poised to open lower

Shares of major U.S. banks were under pressure on Tuesday morning as CNBC reported that Fitch Ratings could potentially downgrade the banking industry and, in turn, reevaluate the credit rating of dozens of banks.

JPMorgan Chase's stock dropped 1.2% in premarket trading, while Bank of America and Citigroup were down about 1.4% each.

Wells Fargo's stock also dipped more than 1%.

—Jesse Pound

Home Depot beats on earnings

Home Depot reported earnings per share and revenue that beat analyst expectations, pushing its stock slightly higher in the premarket.

The home improvement retailer earned $4.65 per share on revenue of $42.92 billion for the three-month period ended July 30. Analysts polled by Refinitiv expected a profit of $4.45 per share on revenue of $42.23 billion.

— Fred Imbert, Melissa Repko

Fitch warns of possible downgrades to banks, including JPMorgan Chase

Fitch warned it may have to downgrade dozens of banks, including JPMorgan Chase. The agency already cut its rating on the industry back in June, but another downgrade would force it to reconsider the ratings on the more than 70 banks it covers.

"It's not inevitable that it goes down," analyst Chris Wolfe said. "We could be at AA- for the next 10 years. But if it goes down, there will be consequences."

— Fred Imbert, Hugh Son

European equity markets open mixed

European markets opened mixed Tuesday as investors weigh data from Asia and the U.K.

The pan-European Stoxx 600 index was flat in the first minutes of trading, with sectors spread across marginally positive and negative territory. Retail stocks led minor gains with a 0.7% uptick, while media stocks dropped 0.3%.

— Hannah Ward-Glenton

China stops reporting youth unemployment rate from August

China's national bureau of statistics has suspended reporting the youth unemployment rate from August, with the category omitted from its July economic report released on Tuesday.

A spokesperson saying this was due to economic and social changes, and that the bureau is reassessing its methodology.

Unemployment in the age 16 to 24 category has soared to record highs in recent months, and reached a record high of 21.3%, according to the June report.

Read the full story here.

— Lim Hui Jie, Evelyn Cheng

Japan second quarter GDP expands 6% on an annualized basis

Japan's economy grew 6% on an annualized basis in the three months ended June, beating expectations of a 3.1% expansion from economists polled by Reuters.

On a quarter-on-quarter basis, growth came in at 1.5% for the second quarter, almost double the 0.8% expected.

The data showed the fastest rate of growth since the fourth quarter of 2020, when Japan recorded a 2.8% quarter-on-quarter growth and an annualized growth of 11.7%.

—Lim Hui Jie

China unexpectedly cuts interest rates on one-year loans by 15 basis points to 2.5%

China's central bank unexpectedly cut key policy rates for the second time in three months on Tuesday.

The People's Bank of China said it cut the interest rate on 401 billion yuan ($55.25 billion) worth of one-year medium-term lending facility (MLF) loans from 2.65% to 2.50.

The central bank also enacted a reverse repurchase operation of 204 billion yuan through seven-day reverse repos, and cut borrowing costs to 1.8%, down from 1.9%.

— Lim Hui Jie

China's July industrial output and retail sales miss expectations

China's industrial production and retail sales figures for July both missed expectations, adding to the weak batch of economic data seen by the country.

Industrial production increased by 3.7% year on year, missing the 4.4% expected by economists polled by Reuters. On a year to date basis, industrial production increased by 3.8% year-on-year.

Separately, retail sales in China grew 2.5% year-on-year, with total retail sales reaching 3.68 trillion yuan in July, lesser than the 4.5% growth rate expected by the Reuters poll.

— Lim Hui Jie

A rare event for the Dow and the S&P 500

In Monday's market rebound, an unexpected event unfolded for the Dow Jones Industrial Average and the S&P 500: Both indexes registered roughly the same point change.

The broad market index gained 0.58% Monday, or 25.67 points. Meanwhile, the 30-stock Dow added 26.23 points, or 0.07%.

The last time these two indexes posted the same point change – rounded up to the nearest whole number, that is – was on June 6, with both adding 10 points.

However, it remains an infrequent occurrence: Prior to June, the last time the S&P 500 and the Dow notched the same point gain was on Jan. 16, 2018.

Dating back to 2010, the two indexes have closed with the same point change 15 times – or less than half a percent of the 3,426 trading sessions that have taken place since then.

-Darla Mercado, Robert Hum

Homebuilder stocks climb as Berkshire reveals stakes

A few homebuilder stocks rose in after-hours trading Monday after a new regulatory filing revealed that Warren Buffett's Berkshire Hathaway built new stakes in them.

The Omaha-based conglomerate picked up $726 million worth of D.R. Horton shares, $70 million worth of NVR shares as well as $17.2 million worth of Lennar in the second quarter, the filing showed. D.R. Horton climbed 2.8% in extended trading, while Lennar gained 1.7% and NVR rose 1.1%.

These stakes are relatively small for Berkshire, whose equity portfolio is worth nearly $350 billion. They could have been purchased by Buffett's two investing lieutenants, Todd Combs and Ted Weschler, who oversee about $15 billion each.

— Yun Li

Discover Financial shares fall as CEO steps down

Shares of Discover Financial Services fell more than 5% after the company announced the resignation of CEO Roger Hochschild, effective immediately.

The financial services company's board appointed John Owen as interim president and CEO, and said Hochschild will stay on as an advisor through the end of the year.

— Samantha Subin

Stock futures open little changed

Stock futures opened little changed on Monday evening.

Futures tied to the S&P 500 were flat, while Nasdaq-100 futures added 0.08%. Futures linked to the Dow Jones Industrial Average lost 20 points, or 0.07%.

— Samantha Subin

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