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Wall Street stocks tripped into the red Thursday as worries about global growth resurfaced following lackluster US and European data.
Stocks had opened higher, but tumbled around the same time as the US Treasury market experienced another yield "inversion" in which the return on 10-year notes fell below that of two-year notes, a worrisome development seen as sign of a possible recession.
Markets have been volatile throughout August amid concerns about worsening trade tensions, softening global growth and a weakening US manufacturing sector. Trading volumes also are low during the summer holiday season which contributes to bigger swings in prices.
Near 17:00, the Dow Jones Industrial Average was down 0.3% to 26 130.51.
The broad-based S&P 500 shed 0.6% to 2 907.69, while the tech-rich Nasdaq Composite Index dropped 0.9% to 7 945.28.
Data from IHS Markit showed a US business activity index dropping from 52.6 in July to 50.9, slightly above the 50 level that separates growth from contraction, after manufacturing activity slowed to the lowest since September 2009.
"Business expectations for the year ahead became more gloomy in August and remain the lowest since comparable data were first available in 2012," said Tim Moore, economics associate director at IHS Markit.
"The continued slide in corporate growth projections suggests that firms may exert greater caution in relation to spending, investment and staff hiring during the coming months."
An IHS report on eurozone business growth rose only slightly in August amid weakness in manufacturing, including in Germany.
Gregori Volokhine, fund manager at Meeschaert Financial Services, said the lackluster European data and the weight from the grinding US-China trade war are weighing on sentiment.
"There's a fear of a global slowdown and a sense that a 25- or 50-basis interest rate cut won't have much effect," Volokhine said, alluding to expectations that the US Federal Reserve will cut interest rates again next month.
Investors are awaiting a speech Friday by Fed Chair Jerome Powell at the annual central bank conference in Jackson Hole, Wyoming that some analysts expect will signal a likely interest rate cut next month.
Powell has come under almost daily attack from US President Donald Trump, who blames the Fed for growing recession fears that have sparked equity market volatility.
But market watchers point to Trump's grinding trade war with China as a key factor that has clouded the growth outlook.
"The main person responsible for the uncertainty is in the White House," Volokhine said.
