US Equity Indexes Slump, Volatility Spikes Amid Gains in Treasury Yields

01:27 PM EDT, 09/02/2025 (MT Newswires) -- US equity indexes headed lower after midday on Tuesday amid a sharp move higher in government bond yields, gold futures, and the dollar.

The Nasdaq Composite slumped 1.6% to 21,117.3, with the S&P 500 down 1.3% to 6,378.4, and the Dow Jones Industrial Average 1% lower at 45,103.8. All sectors except energy fell intraday, with technology, real estate and industrials leading the decliners.

The CBOE Volatility Index surged 15% to 18.56.

The Institute for Supply Management's US manufacturing index rose to 48.7 in August from 48 in July, versus expectations for 49 in a survey compiled by Bloomberg. The print marks the sixth consecutive month below the breakeven level of 50, according to a Jefferies note.

"Volatile tariff policy, increased uncertainty in the economic outlook, and a massive ebb and flow of imports ahead of tariff implementation have significantly disrupted activity in most manufacturing sub-sectors," Jefferies Chief US Economist Thomas Simons said in the note.

US construction spending fell 0.1% in July, as expected in a Bloomberg-compiled survey and following a 0.4% decrease in June.

The S&P Global US manufacturing index was revised downwards to 53 for August from a flash reading of 53.3, compared with expectations for no revision in a survey compiled by Bloomberg.

Most Treasury yields rose, with the 10-year yield up 5.1 basis points to 4.28% and the two-year rate 3.1 basis points higher at 3.65%.

Gold futures rose 2.1% to $3,588.6, after scaling a new peak of $3,594.0 earlier in the session. Silver futures surged 2.3% to $41.11, after hitting an intraday record of $41.34.

In company news, Kraft Heinz (KHC) said its board approved a plan to split the company into two publicly traded entities through a tax-free spin-off. Shares slumped 6.7% intraday, among the steepest declines on the S&P 500 and the Nasdaq.

Nvidia's (NVDA) shares dropped 3.2% intraday, among the worst performers on the Nasdaq and the Dow, following reports that Alibaba (BABA) is developing its own integrated circuits to replace Nvidia's (NVDA) H20 chip.

Biogen (BIIB) and Stoke Therapeutics (STOK) released data from Phase 1/2a and open-label extension studies that support the potential for zorevunersen to be the "first" disease-modifying medicine for Dravet syndrome. Shares of Biogen climbed 3.7% intraday, among the top performers on the S&P 500 and the Nasdaq.

West Texas Intermediate crude oil futures jumped 2.6% to $65.64 a barrel.

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