Stocks fell on Tuesday, the first trading day of the week, as weak data out of China and lower global growth estimates from the International Monetary Fund renewed fears of the global economy slowing down.
The Dow Jones Industrial Average dropped 301.87 points to 24,404.48, led by losses in Goldman Sachs and Caterpillar. The S&P 500 pulled back 1.4 percent to 2,632.90 as the communications services and industrials sectors lagged. The Nasdaq Composite declined 1.9 percent to close at 7,020.36. The major indexes also closed lower for the first time in five sessions. U.S. markets were closed on Monday due to the Martin Luther King Jr. Day holiday.
The Chinese economy grew by 6.6 percent last year, according to official numbers released by China's government. That growth matched analyst expectations. However, it was also China's slowest growth pace in 28 years.
"That's confirmation of what we're concerned about. The last thing we need is have actual data confirming our greatest fears," said Art Hogan, chief market strategist at National Securities. "Now, is some of that tied to trade talks with China and could some of that dissipate if we have a deal done? Absolutely, but it's impossible to untangle those two things right now. That's our reality."