Stocks are slumping Tuesday as more caution creeps into financial markets worldwide.
The S&P 500 was 1% lower in early trading, following up on losses for stocks across Europe and much of Asia.
The Dow Jones Industrial Average was down 370 points, or 1%, at 35,102, as of 9:50 a.m. Eastern time, and the Nasdaq composite was 1.3% lower.
In the U.S., bank stocks dropped after Moodys cut the credit ratings for several smaller and midsized ones amid a long list of concerns about their financial strength.
Across the Pacific, stocks sank 1.8% in Hong Kong and 0.3% in Shanghai after a report showed exports for Chinas troubled economy shrank by the most since the start of the pandemic in 2020.
The worries layered on top of a mixed set of earnings reports from big U.S. companies.
UPS fell 3% after it cut its forecast for revenue this year. It reported stronger profit for the spring but weaker revenue.
Eli Lilly helped to limit the markets losses after jumping 16.4%.
The medicine developer reported profit and revenue for the spring that both topped analysts expectations.
More jolts may be ahead for markets.
The U.S. government later in the morning will report how many job opening were available across the country in June, a test of how resilient the job market remains.
Economists expect a separate report to show U.S. manufacturing continues to struggle under the weight of much higher interest rates.
The Federal Reserve has hiked its main interest rate to the highest level in more than two decades in hopes of grinding down inflation.
High rates work by slowing the entire economy bluntly, which has raised the risk of a recession but also helped inflation to moderate since its peak last summer.
Besides manufacturing, high rates have hit banks particularly hard. Moodys said the rapid rise in rates has led to conditions that hurt profits for the broad industry, while knocking down the value of investments made when rates were super low.
Such conditions helped cause three high-profile failures for three U.S. banks earlier in the spring, which shook confidence in the system.
Moodys also said troubles may be coming for banks with lots of commercial real estate loans, which are hurting as the threat of a U.S. recession remains and work-from-home trends keep people out of offices.
M&T Bank, one of the banks whose credit rating Moodys downgraded, fell 4.7%.
Truist Financial, one of the banks that Moodys said its reviewing for a possible downgrade, fell 4.5%.
Other, larger banks whose credit ratings weren’t affected also sank.
JPMorgan Chase fell 2% and was one of the heavier weights on the S&P 500.
Later this week, the U.S. government will releases data on consumer and wholesale inflation, which could influence what the Federal Reserve does next with interest rates.
The hope on Wall Street is that the cooldown in inflation since its peak above 9% last summer will help persuade the Fed that upward pressure on prices is under control and no more rate hikes are needed.
Forecasters expect Thursdays data to show consumer prices rose by 3.3% in July over a year ago, an acceleration from Junes 3%.
But some economists and investors say getting that list bit of inflation moderation to the Fed’s target of 2% is likely to be the most difficult.
They’re saying Wall Street has become convinced too quickly that the Fed can achieve a soft landing for the economy and that the 19.5% run for the S&:P 500 through the first seven months of this year was overdone.
In the bond market, Treasury yields tumbled as investors moved into investments considered safer.
The yield on the 10-year Treasury fell to 3.98% from 4.10% late Monday. It helps set rates for mortgages and other loans.
The two-year Treasury yield, which more closely tracks expectations for the Fed, fell to 4.73% from 4.79%.
Acclaimed Italian actress Claudia Cardinale, who starred in The Pink Panther and Once Upon A Time In The West, has died aged 87, according to French media reports.
The actress, who starred in more than 100 films and made-for-TV productions, died in Nemours, France, surrounded by her children, her agent told the AFP news agency.
At the age of 17 she won a beauty contest in Tunisia, where she was born to Sicilian parents, and was rewarded with a trip to the Venice Film Festival, kick-starting her acting career.
She had expected to become a schoolteacher before she entered the beauty contest.
Image: Claudia Cardinale at the Prix Lumieres awards ceremony in Paris in January 2013. Pic: AP
Cardinale gained international fame in 1963 when she starred in both Federico Fellini’s 8-1/2 and The Leopard.
She went on to star in the comedy The Pink Panther and Sergio Leone’s Once Upon A Time In The West in 1968.
She considered 1966’s The Professionals as the best of her Hollywood films.
When she was awarded a lifetime achievement at the Berlin Film Festival in 2002, she said acting had been a great career.
“I’ve lived more than 150 lives, prostitute, saint, romantic, every kind of woman, and that is marvellous to have this opportunity to change yourself,” she said.
“I’ve worked with the most important directors. They gave me everything.”
Cardinale was named a goodwill ambassador for the UN Educational, Scientific and Cultural Organisation for the defence of women’s rights in 2000.
CHICAGO — Right-hander Cade Horton was removed after three innings of his start in the Chicago Cubs‘ game against the New York Mets on Tuesday because of back tightness. The club said Horton was removed “as a precaution” after throwing just 29 pitches.
Horton, a leading NL Rookie of the Year candidate, allowed a leadoff homer to New York’s Francisco Lindor but settled down and looked sharp for the remainder of his short outing. Horton allowed two hits, struck out two and departed with the Cubs leading 5-1.
After the Cubs extended the advantage to 6-1, New York rallied against the Chicago bullpen, scoring five unearned runs against Michael Soroka to tie the game and later grabbing the lead in a matchup with playoff implications for both clubs.
Horton, 24, is 11-4 on the season with a 2.67 ERA over 118 innings. The win total leads all rookie pitchers and the ERA leads rookies who have logged at least 100 innings.
Donald Trump disparaged the Russian military and backed Ukraine to retake all its occupied territory in an astonishing about-turn on the war.
In a post on Truth Social, made after talks with Volodymyr Zelenskyy at the United Nations in New York, the US president said a return to “the original borders from where this war started is very much an option”.
“I think Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form,” he wrote.
Mr Trump said “time, patience, and the financial support of Europe and, in particular, NATO” could help Kyv win back lost territory, and said Russia was in “economic trouble”.
He said Moscow had been “fighting aimlessly” for three-and-a-half years – and had it been a “real military power” it would have defeated Ukraine in less than a week.
“This is not distinguishing Russia. In fact, it is very much making them look like ‘a paper tiger’,” he added.
He later admitted he was surprised by Mr Trump’s comments, telling Fox News’ Special Report he has a better relationship with the president than before.
Image: Donald Trump and Volodymyr Zelenskyy at the United Nations. Pic: Reuters
Trump’s patience not ‘infinite’
Mr Trump also appeared to pour cold water on his hopes of persuading Vladimir Putin to sign a peace deal.
Speaking to Emmanuel Macron at the UN summit, he said their relationship had turned out to be meaningless.
Just last month, Mr Trump rolled out the red carpet for the Russian president at a summit in Alaska – in a push to expedite the war’s conclusion.
Before returning to the White House, he repeatedly claimed he’d be able to end the conflict in 24 hours.
Speaking at the UN Security Council, his secretary of state, Marco Rubio, admitted ending the war had proven an “extraordinary challenge”.
He said Mr Trump had “worked on it tirelessly”, but warned Russia his patience is not “infinite”.
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Rigby to Trump: Was Putin’s Alaska invite a mistake?
The US president has previously suggested Ukraine will never be able to reclaim all the territory Russia has occupied since seizing the Crimean Peninsula in 2014.
Ukraine has lost large areas of land in the east of the country.
In the Donetsk region, Russia now controls about 70% of the territory. Kyiv’s forces have been pushed back to four cities analysts have dubbed the “fortress belt”.
Moscow has partly annexed three other regions, too: Luhansk in the east, Zaporizhzhia and Kherson further west.
Image: The situation in Ukraine on 19 September
Trump tells NATO to shoot down Russian jets in its skies
Meanwhile, Russia appears to be provoking its neighbours to the west. Last week, Estonia said three Russian MiG-31 fighter jets violated its airspace for 12 minutes before Italian NATO jets escorted them away.
While talking to Mr Zelenskyy at the UN, Mr Trump was asked by reporters whether he thought NATO should shoot down any Russian planes that entered NATO airspace.
“Yes, I do,” Mr Trump replied.
On Truth Social, he said the US would continue to supply weapons to NATO, and it was for the alliance to “do what they want with them”.
Mr Trump also suggested the Russian people are not aware of “what is really going on with this war”.
He added: “Most of their money is being spent on fighting Ukraine. Putin and Russia are in big economic trouble and this is the time for Ukraine to act.”
He has called on European and NATO allies to increase economic sanctions on Moscow.
In a joint statement following the president’s comments, G7 foreign ministers said discussions were ongoing about additional economic sanctions on Russia.