12:58 PM EDT, 09/03/2024 (MT Newswires) -- US equity indexes fell after midday Tuesday as technology shares slumped alongside a volatility spike.

The S&P 500 dropped 1.5% to 5,561.5, with the Nasdaq Composite down 2.5% to 17,269.1 and the Dow Jones Industrial Average 1.2% lower at 41,077.4. The US observed the Labor Day on Monday.

Technology sat at the bottom of the sector charts, down 3.5% intraday, with Nvidia (NVDA), Taiwan Semiconductor Manufacturing Company (TSM), and Advanced Micro Devices (AMD) leading the mega-caps lower. Energy and communication services were among the steepest decliners. The consumer staples industry group was the top performer, reflecting a defensive mood in markets.

In economic news, the Institute for Supply Management's US manufacturing index rose to 47.2 in August from 46.8 in July but missed expectations for an improvement to 47.5 in a survey compiled by Bloomberg. A reading below 60 is indicative of contraction.

The CBOE's Volatility Index (VIX) surged 16.4% to 18.09.

Most Treasury yields dropped, with the 10-year down 5.9 basis points to 3.85% and the two-year yield 4.1 basis points lower at 3.88%.

West Texas Intermediate crude oil slumped 4% to $70.59 a barrel.

In company news, equity analysts at Wells Fargo (WFC) downgraded Boeing ( BA ) to underweight from equal weight, citing a less-optimistic view of the company's free cash flow opportunity and an expected equity raise that will likely further dilute shares. The analysts also lowered the company's price target to $119 from $185. Boeing ( BA ) slumped 7.8% intraday, the worst performer on the Dow.