Dow sheds nearly 400 points in worst day since March as economic worries return: Live updates

The major averages closed lower Tuesday.

The Dow Jones Industrial Average lost 388.00 points, or 1.14%, to 33,618.88 in its worst day since March. The 30-stock index closed below its 200-day moving average for the first time since May.

The S&P 500 slid 1.47% to 4,273.53, closing below 4,300 for the first time since June 9. Meanwhile, the Nasdaq Composite pulled back 1.57% to 13,063.61.

— Sarah Min

Corporate debt refinancings are going to start hitting profits more urgently starting in 2024, according to Wolfe Research chief investment strategist Chris Senyek.

"Refi's are going to become a much bigger factor next year," Senyek said in a note Tuesday. "[T]hat higher interest expense is likely to create a $5-$7/share headwind for S&P 500 operating EPS in 2024." Wolfe sees S&P 500 operating EPS falling 4.5% in 2024 to $210 whereas the market consensus is for 12% growth to $249.

Wolfe included a table showing $903 billion in U.S. corporate debt (excluding financial companies) coming due in 2024, up 343% from $204 billion in 2023. That rises another 42% in 2025 to $1.28 trillion and 15% in 2026 to $1.47 trillion, before starting to come down.

Senyek also wrote that he now expects yields on the 10-year Treasury note to climb to 5% before the end of 2023, fueled by a wall of U.S. Treasury debt issuance, higher oil prices and the Bank of Japan easing off on its yield curve control policy.

— Scott Schnipper, Michael Bloom

Hawkish signaling from the Federal Reserve may have put downward pressure on equities in recent weeks, but Citi Global Wealth's Steven Wieting believes that the current correction will make way for better investing opportunities in 2024, especially for smaller companies.

As the U.S. central bank has rationed down the availability of credit in the economy, the firm's chief investment strategist told CNBC that investors have been "focused only on the largest and safest balance sheets," pushing up shares of super large-cap companies.

The way forward is not to take a negative view of the leading large-cap stocks, but rather to focus positively on the growth stocks that have been left behind, Wieting said. For instance, small- and mid-cap growth names are currently trading at nearly a 40% discount against large-caps, despite growing earnings more rapidly over the long term, the analyst said.

"It really doesn't mean you have to take a negative view of companies that have benefited from AI or EV at the highest levels, but I think the real return opportunity will be with broadening," Wieting added. "It's increasingly something that we're looking forward to do to doing with more small-caps in portfolios, particularly on a pullback in markets which we seem to be getting."

— Lisa Kailai Han, Sarah Min

The market's largest gold ETF is not doing much to protect investors from the recent decline in stocks and bonds.

The SPDR Gold Shares fund (GLD) was tracking toward its third negative session in four on Tuesday afternoon. The fund is now down about 2% month to date.

Gold could conceivably get a boost as the odds of a U.S. government shut down rise, but the non-yielding metal may be hard sell for investors when interest rates are climbing.

— Jesse Pound

Evercore ISI is getting a little more bullish on Micron Technology heading into Wednesday's earnings report.

Analyst Matthew Prisco lifted his price target on the memory chipmaker to $90 from $80 a share, saying that Micron looks well situated for a modest beat and guidance raise as pricing and bit volume trends improve.

After an "unprecedented downturn and memory utilization cuts, we believe Micron is positioned for strong EPS reacceleration, which will continue to gain momentum as the company regains lost market share related to the [Cyberspace Administration of China's ban] while resuming more meaningful cost downs," he wrote in a Tuesday note.

Prisco also expects Micron to get a lift from artificial intelligence as data-heavy models rely on higher-bandwidth memory. He also forecast that earnings power can approach $10 by the 2025 calendar year.

Micron shares have rallied 36% this year, with Evercore ISI's price target implying about 31% upside from Monday's close.

— Samantha Subin

Stifel analyst Chris O'Cull upgraded Wingstop to buy from hold and assigned a price target of $200, implying shares stand to gain more than 15% from Monday's close.

Shares of Wingstop climbed 2.5% on Tuesday.

"We believe the company is poised to successfully lap difficult comp comparisons in the 2H23 as menu innovation and delivery channel growth, augmented by rapid expansion in the national ad fund, continue to build top-of-mind awareness and drive incremental usage," O'Cull said in a Monday note. "The company's growing scale also translates into better visibility into long-term food costs."

O'Cull added that greater advertising, new products and incremental delivery partnership, as well as the company's domestic space and international growth, make it "unlikely that development will slow soon."

— Pia Singh

The latest spike in Treasury yields has dragged down some of the biggest bond funds in the market to new milestones.

The iShares 20+ Year Treasury Bond ETF (TLT) closed at $89.18 on Monday, which was its lowest close since Feb. 10, 2011, according to FactSet. Other major bond funds are trading at similar levels relative to history.

And the sell-off could get worse. Some Wall Street pros see a chance that the benchmark 10-year Treasury yield can can climb to 5%.

Read more about the impact of changing yields on bond funds at CNBC Pro.

— Jesse Pound

Analysts are expecting a solid earnings report out of Costco after the bell, but focus is on a number that can't be found in the top or bottom line: membership fees.

Bernstein analyst Dean Rosenblum said he'll be watching to see if there's a fee increase, as well as for insights into how a recent crackdown on membership sharing has impacted the company. He said the company is like due for an increase of around $5 based on historical data, which shows an increase of about that amount every half decade.

"Now that food inflation has abated somewhat, Costco may capitalize on the moment and plan for a fee increase," he said in a note to client last week.

But UBS analyst Michael Lasser said the wholesale retailer will likely hold off until next year, citing previous commentary from management around the topic.

"In the past year, COST signaled several times that it was not ready to raise its membership fees given the cost pressures its members were experiencing," Lasser told clients last week.

— Alex Harring

The Dow Jones Industrial Average dropped to session lows in early afternoon trading on Tuesday. The index fell more than 400 points, or 1.2%, setting it up for its biggest one-day slide since March 2023.

At the highs of the day's trading session, the index was down by 126 points.

The other two major indexes also declined on Tuesday, with the S&P 500 falling as much as 61 points, or 1.4%, and the Nasdaq Composite falling as much as 201 points, or 1.5%.

— Lisa Kailai Han, Sarah Min

Advances in Amgen and Travelers Companies helped restrict losses for the Dow.

The two stocks rose 0.4% and 0.3%, making them the only two in the 30-stock index to trade clearly above their flatlines.

The Dow as a whole fell about 1%, led lower by Salesforce and Microsoft, which were both down about 2%.

— Alex Harring

Near-term macroeconomic headwinds may slow down packaged food manufacturers, but Utz is set for a strong growth outlook over the long run, according to RBC.

Analyst Nik Modi initiated coverage of the salty snack food producer at an outperform rating, setting a price target of $17. That implies a 25% upside from the stock's Monday close of $13.56.

Shares of Utz are down over 14% since the start of the year.

"When taking a 12-18 month view, we believe there is a compelling buy case for UTZ, including: 1) getting pure-play exposure to one of the more attractive categories across consumer staples, 2) upside from share gains as the company expands geographically, 3) convergence of margins relative to peers, and 4) a potential take-out scenario," Modi wrote.

— Lisa Kailai Han, Michael Bloom

Check out the companies making headlines in midday trading.

• Cintas — Shares fell 4.8% after the company reported its 2024 fiscal first-quarter earnings. The corporate apparel company posted $3.70 earnings per share on $2.34 billion in revenue, topping analyst consensus estimates of $3.67 per share in earnings and matching revenue forecasts, per StreetAccount. Cintas raised full-year guidance, but the lower end of its EPS and revenue predictions came in below analysts' estimates.
• Pinterest — Shares of the image-sharing platform rose nearly 1% after HSBC initiated coverage of the stock with a buy rating. The Wall Street firm said Pinterest has "the right management team in place, a product fit for shopping and a differentiated capital-light strategy to deliver on its foray into social commerce."
• United Natural Foods — Shares sank 24% on Tuesday after United Natural Foods forecast earnings per share and adjusted EBITDA in the coming year below analysts' estimates, citing profitability headwinds. The food company's guidance ranges between a loss of 88 cents per share to earnings of 38 cents per share, excluding items, while analysts called for $1.94 per share, according to StreetAccount. The company's fiscal fourth-quarter revenue missed analysts' $7.47 billion estimate.

Read here for the full list.

— Pia Singh

Oppenheimer said Domino's Pizza is entering a self-help cycle and is a top idea heading into 2024, marking a turn from a more pessimistic outlook the firm had for the past 18 months.

"We view DPZ as an under-appreciated revival story into '24, and elevate the idea into our 'top picks,'" analyst Brian Bittner said in a note to clients Tuesday.

CNBC Pro subscribers can read the full story here.

— Alex Harring

The ongoing United Auto Workers strike could present a risk to the fight against inflation, according to Barclays. 

The strike, which has targeted plants across the "Big Three" automakers — Ford, General Motors and Stellantis — risks paring down what were already low levels of auto inventories, analyst Pooja Sriram said in a Monday note.

CNBC Pro subscribers can read the full story here.

— Hakyung Kim

Amazon shares slumped 3% after the Federal Trade Commission filed an antitrust lawsuit against the technology giant.

The FTC and attorney generals from 17 states accused the company of maintaining "monopoly power" by inflating prices, degrading quality for shoppers and stifling its competition.

The complaint also alleged that the company uses two key tactics, including anti-discounting measures, to "unlawfully maintain" its position.

— Samantha Subin, Annie Palmer

Tuesday's sell-off pushed the Dow Jones Industrial Average below its 200-day moving average, a key long-term technical level. The move suggests the benchmark's long-term momentum may be waning.

The Dow hasn't closed below that level since May.

— Fred Imbert

Tracking shares of Liberty Media Corp.'s Liberty Sirius XM jumped more than 5% after the media conglomerate proposed a merger with SiriusXM to create a new publicly-listed company.

The new company — controlled by the media conglomerate and created by splitting off its shares in the satellite radio company — would be called New SiriusXM. Liberty Media currently hold a roughly 83% stake in SiriusXM.

"Liberty's proposal rationalizes the dual corporate structure between LSXM and SiriusXM and provides value to all shareholders with a more flexible and attractive currency in New SiriusXM," said Liberty Chief Executive Greg Maffei.

SiriusXM shares inched about 0.2% lower following the news.

— Samantha Subin

Consumer confidence levels declined in September and missed analyst expectations. September's consumer confidence reading came in at 103, down from 108.7 in August and below the 105.5 estimate. Notably, the expectations index tumbled to 73.7, less than the 80 reading generally associated with recessions.

"Consumers feel good about their current situation, including employment prospects, but they are more pessimistic about the future," said Sonu Varghese, Global Macro Strategist at Carson Group.

"Consumer spending reflects this, running above the pre-pandemic trend, however, ongoing news about a potential recession, and issues like higher mortgage rates, student loan repayments, strikes and a potential government shutdown cloud the future outlook," he added.

— Hakyung Kim

All three major indices accelerated losses Tuesday morning after the release of disappointing economic data.

The S&P 500 fell roughly 1% to 4,295, its lowest level since June 9. Year to date, the index is still up nearly 12%.

August new home sales fell short of analyst expectations and were also down 8.7% from July, according to the Commerce Department. The Conference Board's consumer confidence index also missed expectations, falling to 103 in September from 108.7 in August.

Comments made by JPMorgan Chase CEO Jamie Dimon anticipating additional room for rates to rise also pushed stocks down earlier this morning.

— Lisa Kailai Han, Jeff Cox

The selloff in the S&P 500 was broad-based, with all 11 sectors trading in negative territory during midday trading. The broader index was last down by roughly 1%.

Communication services was the biggest laggard, down by more than 1.4%. Consumer discretionary, information technology and utilities were also down by over 1.3%.

Health care and energy outperformed in the broader index, though both were still down by more than 0.4%, each. Energy is on pace to be the best-performing S&P 500 sector in September, up by more than 1.9%.

— Sarah Min, Lisa Kailai Han

Baird reiterated its outperform rating on Rivian, naming the electric vehicle maker a "fresh pick" into third-quarter deliveries. Analyst Ben Kallo forecasts the company's to beat consensus estimates.

"We see Q3 deliveries as a near-term catalyst and expect sentiment to improve as RIVN continues to realize cost benefits from an improving supply chain and the use of in-house components," Kallo said.

He added, "Concerns regarding third party reports of weakening demand have led to recent weakness in the stock and we believe underlying demand remains strong with production improving."

Shares rallied 5% Tuesday morning.

— Hakyung Kim

A strong past few months for oil prices is putting crude on pace for its best quarter in more than a year.

With just days left in the trading month and quarter, both West Texas Intermediate and Brent crude are on pace for their first straight month of price gains. That means, if it holds, both will have climbed in price every month of the third quarter.

WTI has gained about 26.1% since the quarter began, while Brent has climbed around 23.8% in the same period. With those advances, both are on pace to post their best quarters since the first quarter in 2022.

— Alex Harring, Gina Francolla

New home sales in August fell short of expectations while consumer confidence by one measure also was lower than expected, according to economic data released Tuesday.

Homes under contract totaled 675,000 for the month, down 8.7% from July, according to the Commerce Department. Economists surveyed by Dow Jones had been looking for respective numbers of 695,000, which would have represented a 2.7% decline from unrevised July totals.

In other data, the Conference Board's consumer confidence index declined to 103 for September, down from 108.7 in August and below the 105.5 estimate. Importantly, the expectations index tumbled to 73.7, below the 83.3 in August and less than the 80 reading generally associated with recessions.

Finally, the Richmond Federal Reserve's manufacturing index rose to 5 for September, up from -7 in August and better than the -5.5 estimate.

—Jeff Cox

A brief U.S. government shutdown probably wouldn't hit the economy hard but would be "credit negative" for its debt, Moody's Investors Service said Monday.

"While government debt service payments would not be impacted and a short-lived shutdown would be unlikely to disrupt the economy, it would underscore the weakness of US institutional and governance strength" compared to its global peers, analyst William Foster and others wrote in a research note.

The ratings firm also noted that a shutdown would emphasize the "significant constraints" on fiscal policy posed by the partisan warfare in Washington.

"Fiscal policymaking is less robust in the US than in many Aaa-rated peers, and another shutdown would be further evidence of this weakness," the firm said in a note that echoed concerns expressed by Fitch Ratings in an August downgrade of its U.S. credit rating.

—Jeff Cox and Michael Bloom

Bank stocks opened in the red on Tuesday morning.

Major financial institutions such as JPMorgan, Wells Fargo, Goldman Sachs and Morgan Stanley were all down 0.7%, 1%, 1% and 0.7% respectively. These losses come on the heels of comments made by JPMorgan Chase CEO Jamie Dimon suggesting that interest rates still have room to rise.

"I would be cautious," Dimon said in an interview with The Times of India earlier this morning. "We have to deal with all these serious issues over time, and your deficits can't continue forever. So rates may go up more. But I hope and pray there is a soft landing."

— Lisa Kailai Han, Jeff Cox

Stocks opened lower Tuesday.

The Dow Jones Industrial Average dropped 186 points, or 0.54%. The S&P 500 fell 0.7%, while the Nasdaq Composite slid 0.79%.

— Sarah Min

Home prices in 20 big cities across the U.S. were little changed over the past year, according to the S&P CoreLogic Case-Shiller index released Tuesday.

The benchmark's 20-City Composite saw prices rise just 0.1% from a year ago in July, compared to the 1.2% decline in June. That increase was less than the 0.3% consensus forecast from Dow Jones.

On a monthly basis, the 10- and 20-city composites saw respective increases of 0.8% and 0.9%, according to seasonally adjusted data.

—Jeff Cox

HSBC has multiple reasons for liking Pinterest.

"We believe it has the right management team in place, a product fit for shopping, and a differentiated capital-light strategy to deliver on its foray into social commerce," analyst Mohammed Khallouf said in a recent note to clients when initiating coverage of the stock at a buy rating.

CNBC Pro subscribers can read more here.

— Alex Harring

These are some of the stocks making the biggest moves before the bell:

• Fisker — Shares surged 4.1% premarket after Bank of America reinstated coverage with a buy rating. Fisker also said it plans to ramp up deliveries of its Ocean vehicle to 300 per day.
• Tesla — Tesla shares slipped 1% before the market open on news that the European Union will reportedly probe the electric vehicle maker over its China exports.'
• Barclays — Barclays shares rose 2% after Morgan Stanley upgraded the U.K. bank to overweight from equal weight, citing growth in its credit card business and an improved investment banking outlook.

Read the full list of stocks moving here.

— Samantha Subin

U.S.-listed shares of Barclays rose more than 2% premarket after Morgan Stanley said improvements in the U.S. credit card business and increased deal volume could be good news for the bank.

Analyst Alvaro Serrano upgraded shares of the bank, which trade in London, to overweight from equal weight. Meanwhile, the bank's U.S.-listed shares trade under the ticker BCS.

"We think consensus underestimates the revenues in CC&P, which, together with an improved outlook in the IB, leaves us ahead of consensus for the first time," he said in a note to clients, using acronyms for the consumer, cards and payments and investment banking businesses.

CNBC Pro subscribers can click here to read the full story.

— Alex Harring

DraftKings climbed about 3% before the bell after JPMorgan turned bullish on the sports betting stock.

Analyst Joseph Greff upgraded shares to overweight from neutral after a recent bout of underperformance. The stock has slid about 13% since July, while the S&P 500 has shed just around 6%.

"We are taking advantage of sluggish share price performance since late July," Greff said in a note to clients Tuesday.

CNBC Pro subscribers can read the full story here.

— Alex Harring

JPMorgan Chase CEO Jamie Dimon said overnight that the good times for the U.S. economy may not last much longer.

"I will just say, right now it feels good that fiscal stimulation was extraordinary, the monetarism was extraordinary, that was a global phenomenon more in the United States than elsewhere. But that's a little bit of a sugar high," Dimon told CNBC TV18 in India. "And that little bit is going to go away and we are hoping we have a soft landing, but all these other things are there- Ukraine, oil, gas, winter, disruption of trade flows."

"So I think good leadership on the part of America, India, China, Europe, can make sure the negative don't happen. But I am putting myself in quite cautious category," Dimon added.

— Fred Imbert

Tesla shares were down more than 1% after a European Union trade official told The Financial Times that the company, along with other carmakers in Europe that export from China, will face an investigation over whether the EV makers are unfair subsidies.

"Strictly speaking, it's not limited only to Chinese brand electrical vehicles, it can be also other producers' vehicles if they are receiving production-side subsidies," EU executive vice-president Valdis Dombrovskis told The FT.

— Fred Imbert

European markets opened lower as negative momentum continues in the region.

The pan-European Stoxx 600 index was down 0.5% in early trade, with all sectors in the red. Tech stocks saw the biggest decline, falling 1.2%, while household goods fell 1%.

— Hannah Ward-Glenton

Japan Prime Minister Fumio Kishida outlined an economic stimulus plan that includes tax breaks for domestic investments and measures to spur wage growth, Japanese media reported.

The Japan Times reported Kishida said his government "aims to encourage investment and wage hikes through measures such as reducing tax and social security burdens."

Nikkei reported Kishida as saying the hope is to "realize a virtuous economic cycle of capital investment, wage growth and investment in people."

The stimulus package is also expected to include tax cuts for income from "key strategic fields," including semiconductors and batteries.

— Lim Hui Jie

Japan's service producer price index climbed 2.1% year on year in August, its fastest rate of increase in a year.

The reading was higher than July's 1.7%, and the third straight month that wholesale inflation in the service sector has quickened.

On a month on month basis, the service PPI climbed 0.1%.

— Lim Hui Jie

Recreational vehicle provider Thor Industries beat on the top and bottom line after the closing bell on Monday.

The company reported an adjusted $1.68 per share on $2.74 billion in revenue, while analysts polled by LSEG forecast an adjusted 96 cents and $2.42 billion, respectively. Thor executives issued full-year guidance for revenue in the range of $10.5 billion to $11 billion, Wall Street had expected $10.8 billion.

Shares were roughly 1% lower in after hours trading.

— Brian Evans

Stock futures opened little changed on Monday, with the S&P 500 and Nasdaq Composite coming off of winning sessions for the first time in four days.

Futures tied to the Dow Jones Industrial Average added 8 points, or 0.02%. S&P 500 futures gained 0.05%, while Nasdaq 100 futures ticked up by 0.07%.

— Brian Evans