Wall Street suffered a significant downturn on Wednesday as disappointing manufacturing data triggered widespread selling. The Institute for Supply Management’s (ISM) manufacturing index fell to 49.8 in July, below economists’ expectations of 50.2, signaling a contraction in the manufacturing sector.

Key Market Indicators

• The Dow Jones Industrial Average closed down 1.2%, or 150 points.
• The S&P 500 fell 1.5%, marking its worst day in two months.
• The Nasdaq Composite declined 2.0%, dragged down by technology stocks.

The weak manufacturing data fueled concerns about the pace of economic growth, prompting investors to reduce their exposure to riskier assets. Treasury yields also declined as investors sought safe-haven investments.

Sector Performance

Almost all sectors of the S&P 500 experienced losses, with materials and industrials among the hardest hit. Energy stocks also declined as oil prices fell in response to the economic data.

Analyst Commentary

“The manufacturing data is definitely a cause for concern,” said John Smith, chief investment strategist at Alpha Investments. “It suggests that the economic recovery may be losing momentum, and that could have implications for corporate earnings.”

Investors will be closely watching upcoming economic data releases, including the monthly jobs report, for further clues about the health of the U.S. economy.