U.S. stocks fell Tuesday on concerns about the creditworthiness of U.S. banks and the impact China’s sputtering economy and ailing real estate market could have on the global economy.
The Dow Jones Industrial Average and the S&P 500 were both down 0.9% in the early afternoon, while the Nasdaq lost 0.8%.
An analyst from Fitch Ratings said Tuesday that the credit rating agency could lower its outlook for the entire U.S. banking industry, possibly affecting the credit ratings of more than 70 banks including giants JPMorgan Chase (JPM) and Bank of America (BAC). The comments came after fellow credit agency Moody’s downgraded 10 smaller U.S. banks last week.
The Chinese central bank on Tuesday cut a key interest rate by the most since 2020 as the country contends with weak consumer spending, deflation, and falling export activity. The cut came after the release of data showing unemployment in the country ticked up, industrial production fell, and retail sales dipped.
In the U.K., the Bank of England (BOE) is dealing with the opposite problem. Wage growth set a record in the three months ending in June, rising 7.8% over the same period a year ago.
Yesterday, stocks slipped in the morning before recovering to close in the green. The Nasdaq gained just over 1%, while the S&P 500 climbed 0.6% and the Dow finished up 0.1%.
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