Dow loses more than 400 points and goes negative for 2023 as interest rates spike: Live updates

Guggenheim reiterated its sell rating on Tesla ahead of its third-quarter results due on October 18, viewing the EV maker's quarterly delivery numbers as a weight on gross margin.

"We see things differently, with weaker S+X volumes, lower q/q vehicle prices (despite lower supply), lower FSD prices and widening inventory discounts in the U.S. in September all show that demand trends remain negative, and we do not believe a mid-cycle vehicle refresh is going to materially alter that trajectory," Analyst Ronald J. Jewsikow wrote in a Tuesday note. "Overall, we believe investors should view quarterly deliveries as a negative."

Tesla reported third-quarter deliveries of 435,000, falling shorter than consensus estimates of 445,000 to 455,000 units, the note said.

Jewsikow added he believes there is increased risk for negative pricing trends into 2024.

— Pia Singh

The major indexes ended Tuesday's trading session in the red.

The Dow Jones Industrial Average fell 430 points, or 1.3%. The S&P 500 and Nasdaq Composite declined 1.4% and 1.9%, respectively.

— Hakyung Kim

As Tuesday's trading session comes to a close, the Dow is poised to post its sixth worst session of 2023.

The blue-chip average is down around 470 points, or 1.4%, on Tuesday. The Dow last performed worse on March 22, when the index slid 530 points, or 1.6%.

While it's a sizable leg down, it's notably off the toughest days of the year. The worst session of the year took place on Feb. 21, when the 30-stock index dropped 697 points, or 2.1%. The next worst was Jan. 18, when the Dow fell 614 points, or 1.8%.

— Alex Harring

Consumer discretionary stocks are the hardest hit industry group of the 11 major sectors in the S&P 500 Tuesday, falling 2.6% late in the day vs the S&P 500's 1.4% decline.

Leading the consumer stocks lower are Carnival Corp., down 6.1%, Airbnb, off 5.9%, Royal Carribean, falling 5.1%, Domino's Pizza, falling 5.2% and Amazon.com, declining 3.8% and the worst stock among the Magnificent 7.

The only stock in the S&P 500 Consumer Discretionary Index that's gaining Tuesday is Nike, up 0.3%.

— Scott Schnipper

Han Yik, a senior adviser for the New York State Teachers' Retirement System pension, said proxy voting can be a vehicle to mitigate risks related to climate for public companies.

"It's very important that we address long-term risks to our portfolio," Yik said at a conference in New York City on Tuesday. The NYSTRS is one of the largest pension funds in the U.S. "Climate change we've identified as one of those big, big risks."

Yik noted climate change can impact sectors ranging from commercial real estate with flood concerns to insurers given the possibility of higher payouts. Proxy voting is one way to get the companies held by the pension fund to consider potential risks to their business from climate change, he said.

Still, Yik said the focus on environmental issues does not necessitate the need for blanket bans on investing in entire sectors. While Yik said divestment is a last-resort option, the preferred medium is to identify companies in the portfolio with high emissions and try to address concerns with them.

"We prefer engagement to divestment," Yik said. "We think that we can have more influence as owners of the companies than if we were to sell them to someone else."

— Alex Harring

Shares of Amazon are down 11% from their highs on September 13, and that weakness is a buying opportunity, according to JPMorgan.

The ecommerce giant remains the firm's best idea overall despite some investor concerns about the growth trajectory of Amazon Web Services, a slowdown in consumer spending and increased competition, among other things, analyst Doug Anmuth wrote in a note Tuesday.

For one, he believes cloud is a strong secular growth area, with Amazon Web Services seeing growth of 19% in both 2024 and 2025. The company also benefits from consumers that are trading down and searching for better values, he said.

— Michelle Fox

Investors who hoped highly rated bond funds like the iShares 20+ Year Treasury Bond ETF (TLT) would smooth out their returns have had a rude awakening over the past 12 months, according to Strategas ETF strategist Todd Sohn.

"We believe that many investors may not realize that over the last year the TLT has a higher standard deviation of returns than the S&P 500. Put another way, long duration ETFs are a bond product wrapped with equity-like volatility… hardly a diversification tool," Sohn said in a note to clients Tuesday.

— Jesse Pound

The average 30-year fixed mortgage rate jumped to 7.72% on Tuesday, the same day the 10-year Treasury note yield climbed to a 16-year high. Mortgage rates have not been this high since late 2000.

"It is now the first week of October, and data has been stronger," wrote Matthew Graham, chief operating officer at Mortgage News Daily. "This morning's JOLTS is the biggest, baddest confirmation so far this week, and it's pushing yields to fresh long-term highs. Pretty simple stuff, actually, even if unpleasant and unfortunate for fans of low rates."

— Diana Olick, Fred Imbert

Utilities stocks bucked Tuesday's selloff trend with the S&P 500 sector last up nearly 0.8%.

NiSource, FirstEnergy jumped more than 3% each, while CMS Energy and CenterPoint Energy gained more than 2%. Consolidated Energy and DTE Energy added about 2% each.

— Samantha Subin

Sphere popped more than 11% in Monday's session as investors reacted to music group U2 opening the company's new Las Vegas performance venue over the weekend. But while the footage from the new venue dazzled viewers, Wall Street isn't so sure about the stock.

"We come away from the event with a greater appreciation of the potential for artist residencies and for Sphere to participate in more regular way touring," Morgan Stanley analyst Benjamin Swinburne said in a note to clients reiterating his equal weight rating on the stock on Monday.

"However, live performances from high end acts like U2 are unlikely alone to scale the business to profitability," he added.

Swinburne isn't alone. All six of the ratings on the stock from Wall Street are equivalent to a hold, according to LSEG.

— Alex Harring

The benchmark 10-year Treasury yield hit its highest level in 16 years Tuesday, as fears of higher Federal Reserve interest rates to fight inflation rattled Wall Street. Over the past month, the benchmark rate has jumped more than 50 basis points.

"The intensification now? The rearing of inflation which for decades was assumed dead. And it's simply not that easy to eradicate as we're seeing with union strikes and success across the country. High debt, high rates. Welcome to 2023," wrote Gregory Faranello, head of U.S. rates strategy at AmeriVet Securities, this week.

— Fred Imbert

Technology stocks underperformed on Tuesday, dragging down the tech-heavy Nasdaq Composite more than 2%.

The fall in technology stocks also contributed to a 1.6% decline in the S&P 500, with the information technology sector last down 2.2%. Consumer discretionary lost 2.7%.

Zscaler, Airbnb and On Semiconductor were among some of Tuesday's biggest tech-focused laggards, sliding more than 5% each. Popular AI-focused names Nvidia, Advanced Micro Devices and Microsoft fell more than 3%. Marvell Technology dropped 4%, while Crowdstrike shed 5%.

Oracle, Salesforce and Adobe each fell about 3%, while Amazon slid 4%.

— Samantha Subin

The Cboe Volatility Index briefly touched 20.07 in late morning trading on Tuesday, rising above 20 for the first time since late May.

The VIX, derived from stock options prices and measuring expected volatility over the next 30 days, is often regarded as a sentiment indicator since low readings are associated with investor complacency and high readings with fear and skittishness.

— Scott Schnipper, Gina Francolla

The major averages reached session lows shortly after 2 p.m. ET, with the Dow trading more than 500 points lower. The S&P 500 and Nasdaq lost 1.6% and 2.1%, respectively.

Both the Dow and S&P 500 were headed for their biggest one-day losses since March. The Nasdaq was on track for its worst session going back to Aug. 2.

— Fred Imbert

KeyBanc Capital Markets analyst Justin Patterson downgraded shares of Airbnb, saying he expects leisure travel demand will normalize after a boost from the pandemic recovery.

Airbnb shares fell more than 5% midday Tuesday.

— Sarah Min

The Dow fell more than 400 points in Tuesday's session, led into the red by Goldman Sachs.

The bank stock slid more than 3%, making it the worst performer of the 30 members in the blue-chip average. Home Depot and American Express were the next two biggest losers, with both stocks down around 2.5%.

Just about one-sixth of Dow members traded up in the session. Intel was the only stock in the index up more than 1%.

— Alex Harring

Wall Street may have already seen a market bottom when the S&P traded at 3,500 last year, according to Fred Alger Management chief executive and investment officer Dan Chung.

"Since a year ago, we've had about seven months up out of the last 11 or 12. We've had two months of correction or pullback and its natural. We expect a little bit more, we see a strong economy, but we also see the Fed fighting the fight with inflation," Chung told CNBC's "Squawk on the Street" on Tuesday. "[T]his is a natural pullback in what I'd call a new bull market."

— Brian Evans

The dramatic move in interest rates over the past two weeks does not appear to be sustainable, according to Ned Davis Research.

Joseph Kalish, the firm's chief global macro strategist, said in a note to clients that the move in yields has been divergent between different types of bonds — with long-term Treasurys hit harder than leveraged loans, for example — in a way that feels over done.

"The market seems to have gotten way out in front of the fundamentals. The extreme readings in momentum and sentiment argue for some stabilization in the internals in the coming weeks," Kalish said.

— Jesse Pound

Citi is replacing Apple with Arista Networks as its top pick in the communications equipment space.

"We continue to see attractive risk-reward on communication equipment stocks following our June launch," wrote Atif Malik in a Monday note.

According to the analyst, the firm's broader IT hardware and communications equipment coverage area's outperformed the S&P 500 by 300 basis points in the third quarter and the PHLX Semiconductor Sector Index by 500 basis points.

The firm anticipated "further rotation into the group as Y/Y bookings decline decelerates and P/E valuation discount of ~900bps closes with semis."

In August, the firm upgraded Arista Networks to a buy from neutral rating, viewing the networking equipment stock as an early Ai play.

— Samantha Subin

Warby Parker is likely to see growing revenues and expanding margins in 2024 due to four key drivers, according to Evercore ISI.

The firm upgraded Warby Parker stock to outperform on Monday. Shares were up more than 6% in midday trading.

"We view WRBY's valuation as highly attractive vs. comps, on a growth-adjusted basis," wrote analyst Mark Mahaney. "A highly competitive optical vision market and some uncertainty over WRBY's long-term sustained profitability potential remain real risks, but we see these risks as more than fully reflected in current valuation."

CNBC Pro subscribers can read the full story here.

— Lisa Kailai Han

Eli Lilly shares dove more than 3% after the pharmaceutical giant announced plans to buy cancer treatment company Point Biopharma for about $1.4 billion, or $12.50 a share.

The deal will help Eli Lilly build on its capabilities within the cancer therapy space.

Point Biopharma is currently testing its radiogland therapy candidate to treat prostate cancer patients. Results from a late-stage study are expected by the end of 2023. Radiogland therapies utilize radioactive atoms to target cancer.

Point Biopharma shares popped more than 85% on the news.

— Samantha Subin

Bank of America double upgraded shares of HP to buy from underperform on Tuesday, citing an attractive valuation and strong fundamentals.

HP stock, which has fallen 23% from its July's highs, has now provided investors with a good entry point.

"In our opinion, this multiple is justified given it balances near-term pressures the company is facing vs. long term opportunities," wrote analyst Wamsi Mohan. "Positives drivers include an improving PC market backdrop, improved profitability from cost actions and stable to higher free cash flow over the next several years."

CNBC Pro subscribers can read the full story here.

— Lisa Kailai Han

Stabilizing Chinese demand and a shift towards higher-priced graphics processing unit could mean more gains to come for Nvidia, according to KeyBanc.

The firm upgraded its price target for Nvidia to $750 on Tuesday. Boosted by the artificial intelligence run, Nvidia has rallied over 200% since January.

"Longer term, we see more meaningful capacity coming online in 2H24, as well as continued outsized growth as NVDA looks to pull in the ramp of its next generation GPU, the B100, into 4Q24," wrote analyst John Vinh.

CNBC Pro subscribers can read the full story here.

— Lisa Kailai Han

Gold continued its steep sell-off on Tuesday, notching its longest losing streak since August 2022 as concerns about higher-for-longer interest rates weighed on the market.

Spot gold was recently down 0.4% at $1,819.50 per ounce, falling for a seventh consecutive session to its lowest since March 9. U.S. gold futures shed 0.6% to $1,835.60.

— Pia Singh

Financial stocks slid on Tuesday as interest rates jumped again, fueling fears that the U.S. economy would tip into recession.

The Financial Sector SPDR Fund (XLF) fell 1.3%. Shares of Goldman Sachs lost 3%, while Wells Fargo shed 2%.

Regional bank stocks were also under pressure, with the SPDR S&P Regional Banking ETF (KRE) falling 2.3%. Higher rates were one of the causes of the failure of Silicon Valley Bank and other regional lenders this spring.

Shares of Western Alliance, which was one of the regional bank stocks hit hard earlier this year, sank more than 6%.

— Jesse Pound

The yield on the U.S. 10-year benchmark Treasury jumped this morning, after the August Job Openings & Labor Turnover Survey revealed an unexpected surge in employment vacancies.

The U.S. 10-year yield spiked over 8 basis points to as high as 4.766% before edging back down, setting a new 16-year record. This is the highest the yield on the benchmark U.S. 10-year note has climbed since August 15, 2007, when it reached 4.752%.

Stocks simultaneously sold off upon the news.

— Lisa Kailai Han

Correction: The 10-year Treasury yield hit its highest level in 16 years. A previous version of this post misstated the milestone.

The Dollar Index, a measure of the grenback's standing against six leading global currencies, climbed to its highest level Tuesday since Nov. 2022.

The strong currency helped blow a hole in the gold trade, driving December futures contracts on the metal down to $1830.90 an ounce, or the lowest since last March. Gold is less attractive to non-U.S. buyers as its cost in dollars rises, plus its appeal as an inflation hedge lessens if the U.S. currency is appreciating.

Similarly, December silver contracts fell to $20.87 an ounce Tuesday, also the lowest since March. December copper contracts — the benchmark base, or industrial, metal — fell to their weakest since last May.

— Scott Schnipper, Gina Francolla

The August Job Openings & Labor Turnover Survey revealed there were more vacancies than economists expected.

The survey showed 9.6 million open roles. Economists polled by Dow Jones anticipated 8.8 million jobs.

— Alex Harring

The Dow Jones Industrial Average fell more than 100 points at the start of Tuesday's trading session.

The S&P 500 traded slid 0.5%, while the tech-focused Nasdaq Composite pulled back 0.6%.

— Hakyung Kim

A 11% year-to-date selloff means that shares of Warner Music Group are now trading at an attractive valuation, according to UBS.

The firm upgraded Warner Music Group stock to buy from neutral in a Monday note. Shares climbed 3.5% before the bell.

"We expect the recent digital service providers' (DSP) price increases ... new monetization opportunities from emerging platforms (renewed TikTok deal) and improving stream share to provide upside to the Street," wrote analyst Batya Levi.

CNBC Pro subscribers can read the full story here.

— Lisa Kailai Han

West Texas Intermediate crude dropped to $87.76 Tuesday morning. This was its lowest level since Sept. 12, when WTI traded as low as $87.22. Brent crude hit a low of $89.50, the lowest level since Sept. 8, when Brent traded as low as $89.30.

The SPDR S&P Oil & Gas ETF is down 0.5% in premarket trading. The ETF is on pace for its third straight negative day. Silverbow Resources, Callon Petroleum, Kosmos and Marathon Oil are leading the losses Tuesday morning.

— Hakyung Kim

The 10-year Treasury note yield — key to the housing market via its influence on mortgage rates — climbed to 4.745% early Tuesday, the highest since Aug. 15, 2007. The 30-year bond yield touched 4.862%, its highest yield since May, 2009 (when it traded above 5%).

Five-year note yields went back farther in time, reaching 4.764% on Tuesday, the highest since July, 2007.

"The worry is that the escalating federal budget deficit will create more supply of bonds than demand can meet, requiring higher yields to clear the market; that worry has been the Bond Vigilantes' entrance cue," economist Ed Yardeni of Yardeni Research wrote in his Morning Briefing note Tuesday. "We are still counting on moderating inflation to stop the beatings in the bond market."

— Scott Schnipper, Gina Francolla

These are the stocks moving the most in premarket trading:

• Warby Parker — Warby Parker jumped about 4% after Evercore ISI upgraded the eyeglass retailer to an outperform rating, saying that shares could rally more than 50% as the company's margins and revenue growth reaccelerate.
• Eli Lilly, Point Biopharma — Shares of Point Biopharma popped 85% after Eli Lilly announced it would buy the cancer therapy maker for $12.50 in cash, or roughly $1.4 billion.
• HP — Shares added 2.5% after being double upgraded by Bank of America to buy from underperform. The bank expects improving fundamentals for the PC maker, with free cash flow hitting a bottom in 2023.

Read the full list of stocks moving here.

— Samantha Subin

AllianceBernstein is growing faster than its peers but priced at a discount, according to Goldman Sachs.

Analyst Alexander Blostein upgraded the asset manager to buy from neutral, saying that AllianceBernstein seems to have found the right combination of strategies to grow its fees in a competitive environment.

"We think the market is under appreciating AB's industry-leading organic fee growth prospects and its differentiated operating margin expansion, resulting in a more durable EPS growth outlook over the next 2 years," Blostein said.

One reason for AllianceBernstein's relative strength is its larger exposure to the private credit to its rivals, Blostein said.

— Jesse Pound

Tuesday marks the second of a two-day gathering convening leaders in the environmental, social and corporate governance investing space in New York.

At the event, which is held by Reuters, the "social" pillar of ESG has been a focus of attention. Social has historically been seen as more nebulous and ill-defined than its two counterparts. One moderator of a panel put it more succinctly, calling social the "neglected middle child" within ESG.

Sessions at the conference focused on the social sector of ESG analyze topics such as bringing in more underrepresented voices to better quantifying social issues.

— Alex Harring

Fundstrat head of technical strategy Mark Newton said in a note Monday night that "US Equity markets are likely in a bottoming process, and I feel that time-wise, lows could likely be in place sometime this week."

"One can't rule out a retest of lows which would bring about a mild undercut, and drive SPX likely to 4200-4225.  However, this would mark an excellent risk/reward opportunity for an October rally," he said.

The S&P 500 closed Monday's session at 4,288.39.

— Fred Imbert

Negative sentiment from the start of the week rolled into Tuesday's open, with the regional Stoxx 600 index 0.32% lower at 8:15 a.m. London time.

Utilities fell 1.3%, while health-care stocks managed to gain 0.37%.

The U.K.'s FTSE 100 was flat as Germany's DAX and France's CAC 40 were both down by around 0.4%.

— Jenni Reid

Not only did utilities have a notably terrible day, renewable energy names also slid during Monday's trading.

The Invesco Solar ETF (TAN) shed 4.5%, as companies like SolarEdge and Enphase Energy tumbled.

Barclays downgraded SolarEdge to equal weight, warning that the company and its peer Enphase could be hampered by price cuts and market share losses. SolarEdge dropped nearly 5.4%, while Enphase tumbled 2.7%.

Sunrun dropped 10% after Susquehanna trimmed its price target.

Other renewable names that had a rough start to the month include Plug Power and Bloom Energy, which dropped 10% and 8%, respectively.

-Darla Mercado, Ethan Kraft

The Nasdaq-100 Index rose again Monday, the 14th week in a row that the benchmark for large-cap, nonfinancial stocks traded on the Nasdaq Stock Market rallied on the first trading day of the week.

In a streak noted in an intraday report by BTIG chief market technician Jonathan Krinsky, the last time the Nasdaq-100 failed to advance on the first day of the week was back on June 26. The string of gains even includes Labor Day weekend, when the first day of trading was Tuesday, Sept. 5, and the week of the 4th of July, when Independence Day fell on a Tuesday and interrupted trading.

"At this point the 'green Monday/first day of week' streak is not only extremely rare, but just bizarre," Krinsky wrote. "Interestingly over the course of this streak from late June, the [Nasdaq-100] is down modestly, so the strong starts to the week aren't leading to any followthrough."

— Scott Schnipper, Michael Bloom

Municipal bonds typically pull back in September and October, but they could see a pop as the year winds down, Wells Fargo Investment Institute found.

"Municipal bonds have historically seen negative performance during September, and to a lesser extent, October," wrote municipal analyst Dorian Jamison. He noted that in September 2022, municipal bonds returned -3.8%, the worst month of performance dating back to 2018, according to the Bloomberg U.S. Municipal Bond Index.

These bonds do enjoy a pop in November and December, however. Last November, munis had a return of 4.7%, the best single month of performance going back to 2018, Jamison wrote.

"While past performance is not indicative of future results, we expect that a pullback in the market may potentially offer a more attractive entry point heading into the final quarter of the year, when the technical for munis have traditionally been more favorable," he said.

Sectors that have outperformed the broader muni market include tobacco, transportation and health care, Jamison said.

-Darla Mercado

Stock futures opened little changed on Monday, following a session that saw the yield on the 10-year Treasury climb to its highest level since 2007.

Futures tied to the Dow Jones Industrial Average fell 4 points, or 0.01%. S&P 500 futures climbed 0.03%, while Nasdaq 100 futures ticked up 0.04%.

— Brian Evans