Wall Street tumbles, and US stocks head toward their worst loss in a month

Key Points

• The price of gold reached a new record high of $3,571.50 per ounce, reflecting a 1.4% increase as investors seek safer assets amid economic uncertainty.
• U.S. markets were closed for Labor Day, leading to mixed performances in global shares, with Asian markets showing divergent trends.
• The U.S. Court of Appeals ruled against President Trump's tariffs, causing shifts in market sentiment and highlighting ongoing tensions regarding trade policies.
• Increased focus on upcoming U.S. economic data, including durable goods orders and jobless claims, may provide insights into the resilience of the economy amidst higher tariffs.

NEW YORK (AP) — U.S. stocks are tumbling on Tuesday, and some of Wall Street’s biggest stars are leading the way lower.

The S&P 500 sank 1.2% and was on track for its worst loss in a month. The Dow Jones Industrial Average was down 498 points, or 1.1%, as of 9:37 a.m. Eastern time, and the Nasdaq composite was down a market-leading 1.4%. All three are still close to their recently set records.

Nvidia and other companies that have benefited from the frenzy around artificial-intelligence technology were some of the heaviest weights on the market. They have soared for years on expectations that they’re at the vanguard of the next revolution for the global economy. But they’ve also shot so high that critics say their prices have simply become too expensive.

Nvidia, whose chips are powering much of the move into AI, fell 2.3%. Broadcom, another chip giant, fell 2.1%.

The overall stock market was feeling pressure from rising yields in the bond market, where the 10-year Treasury yield climbed to 4.27% from 4.23% late Friday. When bonds are paying more in interest, investors are less willing to pay high prices for stocks.

Longer-term bond yields are on the rise around the world, in part because of worries about how difficult it will be for governments to repay their growing mountains of debt.

In the United States, Treasury yields are feeling additional pressure from President Donald Trump’s attacks on the Federal Reserve for not cutting interest rates sooner. The fear is that a less independent Fed will be less likely to make the unpopular decisions needed to keep inflation under control, such as keeping short-term interest rates higher than investors would like.

Tuesday was also the first opportunity for trading in the U.S. Treasury market after a federal appeals court ruled that Trump overstepped his legal authority when announcing sweeping tariffs on almost every country on Earth, though it left the tariffs in place for now. While the tariffs have created confusion and may have hurt the U.S. job market, they also have brought in revenue that could help the U.S. government pay some of its debt.

In another signal about increasing worries in financial markets, the price of gold rose 1% and was near its record. The metal has often provided a haven for investors in times of uncertainty.

On Wall Street, Constellation Brands tumbled 6.4% after the beer, wine and spirits company warned that it’s seen a slowdown in purchases of its high-end beers, particularly among its Hispanic customers. That pushed it to slash its forecast for profit this fiscal year.

Kraft Heinz slipped 1.4% after announcing that it’s splitting into two, a decade after a merger of the brands created one of the biggest food companies on the planet.

One of the companies will include shelf stable meals and include brands such as Heinz, Philadelphia cream cheese and Kraft Mac & Cheese. The other will include the Oscar Mayer, Kraft Singles and Lunchables brands. The official names of the two companies will be released later.

Among the market’s few gainers was PepsiCo, which jumped 3.5% after an investment firm said it sent suggestions to the company’s board to reaccelerate its growth and boost financial performance. The investor, Elliott Management, has a history of buying into companies and then pushing for big changes that can lead to better stock performance.

In stock markets abroad, indexes slumped across Europe, with Germany’s DAX losing 2%. That was after a more mixed finish in Asia, where indexes rose 0.9% in Seoul but fell 0.5% in Hong Kong.

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AP Business Writer Elaine Kurtenbach contributed.