Dow sheds nearly 400 points in worst day since March as economic worries return: Live updates

The major averages closed lower Tuesday.

The Dow Jones Industrial Average lost 388.00 points, or 1.14%, to 33,618.88 in its worst day since March. The 30-stock index closed below its 200-day moving average for the first time since May.

The S&P 500 slid 1.47% to 4,273.53, closing below 4,300 for the first time since June 9. Meanwhile, the Nasdaq Composite pulled back 1.57% to 13,063.61.

— Sarah Min

Corporate debt refinancings are going to start hitting profits more urgently starting in 2024, according to Wolfe Research chief investment strategist Chris Senyek.

"Refi's are going to become a much bigger factor next year," Senyek said in a note Tuesday. "[T]hat higher interest expense is likely to create a $5-$7/share headwind for S&P 500 operating EPS in 2024." Wolfe sees S&P 500 operating EPS falling 4.5% in 2024 to $210 whereas the market consensus is for 12% growth to $249.

Wolfe included a table showing $903 billion in U.S. corporate debt (excluding financial companies) coming due in 2024, up 343% from $204 billion in 2023. That rises another 42% in 2025 to $1.28 trillion and 15% in 2026 to $1.47 trillion, before starting to come down.

Senyek also wrote that he now expects yields on the 10-year Treasury note to climb to 5% before the end of 2023, fueled by a wall of U.S. Treasury debt issuance, higher oil prices and the Bank of Japan easing off on its yield curve control policy.

— Scott Schnipper, Michael Bloom

Hawkish signaling from the Federal Reserve may have put downward pressure on equities in recent weeks, but Citi Global Wealth's Steven Wieting believes that the current correction will make way for better investing opportunities in 2024, especially for smaller companies.

As the U.S. central bank has rationed down the availability of credit in the economy, the firm's chief investment strategist told CNBC that investors have been "focused only on the largest and safest balance sheets," pushing up shares of super large-cap companies.

The way forward is not to take a negative view of the leading large-cap stocks, but rather to focus positively on the growth stocks that have been left behind, Wieting said. For instance, small- and mid-cap growth names are currently trading at nearly a 40% discount against large-caps, despite growing earnings more rapidly over the long term, the analyst said.

"It really doesn't mean you have to take a negative view of companies that have benefited from AI or EV at the highest levels, but I think the real return opportunity will be with broadening," Wieting added. "It's increasingly something that we're looking forward to do to doing with more small-caps in portfolios, particularly on a pullback in markets which we seem to be getting."

— Lisa Kailai Han, Sarah Min

The market's largest gold ETF is not doing much to protect investors from the recent decline in stocks and bonds.

The SPDR Gold Shares fund (GLD) was tracking toward its third negative session in four on Tuesday afternoon. The fund is now down about 2% month to date.

Gold could conceivably get a boost as the odds of a U.S. government shut down rise, but the non-yielding metal may be hard sell for investors when interest rates are climbing.

— Jesse Pound

Evercore ISI is getting a little more bullish on Micron Technology heading into Wednesday's earnings report.

Analyst Matthew Prisco lifted his price target on the memory chipmaker to $90 from $80 a share, saying that Micron looks well situated for a modest beat and guidance raise as pricing and bit volume trends improve.

After an "unprecedented downturn and memory utilization cuts, we believe Micron is positioned for strong EPS reacceleration, which will continue to gain momentum as the company regains lost market share related to the [Cyberspace Administration of China's ban] while resuming more meaningful cost downs," he wrote in a Tuesday note.

Prisco also expects Micron to get a lift from artificial intelligence as data-heavy models rely on higher-bandwidth memory. He also forecast that earnings power can approach $10 by the 2025 calendar year.

Micron shares have rallied 36% this year, with Evercore ISI's price target implying about 31% upside from Monday's close.

— Samantha Subin

Stifel analyst Chris O'Cull upgraded Wingstop to buy from hold and assigned a price target of $200, implying shares stand to gain more than 15% from Monday's close.

Shares of Wingstop climbed 2.5% on Tuesday.

"We believe the company is poised to successfully lap difficult comp comparisons in the 2H23 as menu innovation and delivery channel growth, augmented by rapid expansion in the national ad fund, continue to build top-of-mind awareness and drive incremental usage," O'Cull said in a Monday note. "The company's growing scale also translates into better visibility into long-term food costs."

O'Cull added that greater advertising, new products and incremental delivery partnership, as well as the company's domestic space and international growth, make it "unlikely that development will slow soon."

— Pia Singh

The latest spike in Treasury yields has dragged down some of the biggest bond funds in the market to new milestones.

The iShares 20+ Year Treasury Bond ETF (TLT) closed at $89.18 on Monday, which was its lowest close since Feb. 10, 2011, according to FactSet. Other major bond funds are trading at similar levels relative to history.

And the sell-off could get worse. Some Wall Street pros see a chance that the benchmark 10-year Treasury yield can can climb to 5%.

Read more about the impact of changing yields on bond funds at CNBC Pro.

— Jesse Pound

Analysts are expecting a solid earnings report out of Costco after the bell, but focus is on a number that can't be found in the top or bottom line: membership fees.

Bernstein analyst Dean Rosenblum said he'll be watching to see if there's a fee increase, as well as for insights into how a recent crackdown on membership sharing has impacted the company. He said the company is like due for an increase of around $5 based on historical data, which shows an increase of about that amount every half decade.

"Now that food inflation has abated somewhat, Costco may capitalize on the moment and plan for a fee increase," he said in a note to client last week.

But UBS analyst Michael Lasser said the wholesale retailer will likely hold off until next year, citing previous commentary from management around the topic.

"In the past year, COST signaled several times that it was not ready to raise its membership fees given the cost pressures its members were experiencing," Lasser told clients last week.

— Alex Harring

The Dow Jones Industrial Average dropped to session lows in early afternoon trading on Tuesday. The index fell more than 400 points, or 1.2%, setting it up for its biggest one-day slide since March 2023.

At the highs of the day's trading session, the index was down by 126 points.

The other two major indexes also declined on Tuesday, with the S&P 500 falling as much as 61 points, or 1.4%, and the Nasdaq Composite falling as much as 201 points, or 1.5%.

— Lisa Kailai Han, Sarah Min

Advances in Amgen and Travelers Companies helped restrict losses for the Dow.

The two stocks rose 0.4% and 0.3%, making them the only two in the 30-stock index to trade clearly above their flatlines.

The Dow as a whole fell about 1%, led lower by Salesforce and Microsoft