U.S. stocks have declined by more than 2.5% over the last two days (Oct. 2) on worries that a slowdown in manufacturing will spread to other parts of the U.S. economy. The catalyst for the increased volatility was the release of the U.S. Purchasing Managers' Index (PMI) on Tuesday (Oct. 1), which showed manufacturing activity contracting in September for the second month in a row, falling to its lowest level in 10 years. Cyclical sectors led the way on the downside, with industrials, financials, materials and energy among the hardest hit.
While market volatility can be unsettling, we're not surprised by its return or the slowdown in manufacturing. We highlight the following:
Angelo Kourkafas, CFAInvestment Strategy Analyst
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