Dow Falls 159 Points as August Selloff Resumes

The selloff resumed on Tuesday.

A banking downgrade and disappointing economic data flipped the switch back on.

The S&P 500 dropped 0.4%, while the Dow Jones Industrial Average fell 159 points, or 0.5%. The Nasdaq Composite slid 0.8%.Moody’s downgraded some U.S. banks, saying that high interest rates are prompting depositors to move money away from banks and into money market funds. That sparked fears that banks may have to limit their lending activities, which would also limit spending in the economy.

Also, Chinese exports fell 14.5% year over year in July, worse than economist’s expectations of a 12.5% drop. That signifies that global demand is weak.

While those events drove stocks down Tuesday, they’re part of a broader picture driving the S&P 500 down 1.9% from its closing high for this year. Bond yields have recently risen as the Treasury issues more debt, which is weighing on bond prices and lifting yields. For the moment, markets are concerned about the impact of higher rates on the economy.