World stocks and commodity prices dropped on Tuesday as poor Chinese data intensified fears about China’s economic health and its effect on other economies.
The S&P 500 fell more than 2 percent as surveys showed China’s manufacturing sector shrinking at its fastest pace in three years and its services sector also cooling.
Oil prices initially fell more than 4 percent after rallying more than 8 percent on Monday.
“With the weak data coming out, we’re going to see the negative sentiment from the last few weeks continuing,” said Joe Rundle, a senior sales trader at ETX Capital.
The Dow Jones industrial average .DJI fell 359.91 points, or 2.18 percent, at 16,168.12. The Standard & Poor’s 500 Index .SPX was down 41.64 points, or 2.11 percent, at 1,930.54. The Nasdaq Composite Index .IXIC was down 79.94 points, or 1.67 percent, at 4,696.57.
Stocks added to losses after data showed U.S. factory activity hit a more than two-year low in August.
MSCI’s all-country stock index .MIWD00000PUS lost 2.35 percent, while the pan-European FTSEurofirst 300 stocks index .FTEU3 was down 3.2 percent.
Asian stocks, particularly in Japan .N225 and Australia, fell overnight, and the gloomy mood extended to Europe. The FTSEurofirst 300 .FTEU3 dropped 3.2 percent, following its worst month in four years.
In the oil market, Brent crude LCOc1 dropped $3.24 to $50.91 a barrel. U.S. crude CLc1 was down $3.10 at $46.10 a barrel. On Monday it settled up $3.98, or 8.8 percent.
While shares and commodities remained the focus, the mood was similarly wary in the currency and bond markets.
The benchmark 10-year U.S. Treasury note US10YT=RR was up 6/32, the yield at 2.179 percent.
The safe-haven Japanese yen JPY= and the low-yielding euro EUR= both rose against the dollar, while a U.S. dollar index .DXY was down 0.1 percent.
Russia’s ruble was among the hardest-hit emerging market currencies as the price of oil fell.
