Stock market today: Wall Street drops as its September slump gets even worse

NEW YORK — Wall Street’s September swoon accelerated, knocking stocks down to their lowest levels since June. The S&P 500 fell 1.5% Tuesday, its fifth drop in six days. The Dow lost 388 points and the Nasdaq composite gave back 1.6%. Stocks have tumbled this month, which is on track to be their worst of the year, as the realization sets in that the Federal Reserve will keep interest rates high for a long time as it tries to get inflation lower.

Treasury yields were near their highest levels since 2007 following a mixed batch of reports on the economy. The yield on the 10-year Treasury rose to 4.55% from 4.54% late Monday. While housing and manufacturing have felt the sting of high interest rates, the economy overall has held up well enough to raise worries that upward pressure still exists on inflation. That pushed the Fed last week to say it will likely cut interest rates by less next year than earlier expected. The Fed’s main interest rate is already at its highest level since 2001 in its drive to get inflation back down to its target.

After looking at the seven shutdowns that lasted 10 days or more since the 1970s, she found the S&P 500 dropped an average of roughly 10% in the three months heading into them. Stocks managed to hold up rather well during the shutdowns, falling an average of just 0.2%, before rebounding meaningfully afterward.

Big Tech stocks tend to be among the hardest hit by high rates, and they were the heaviest weights on the index. Apple fell 2.2% and Microsoft lost 2.2%.

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