01:27 PM EDT, 09/02/2025 (MT Newswires) -- US equity indexes headed lower after midday on Tuesday amid a sharp move higher in government bond yields, gold futures, and the dollar.

The Nasdaq Composite slumped 1.6% to 21,117.3, with the S&P 500 down 1.3% to 6,378.4, and the Dow Jones Industrial Average 1% lower at 45,103.8. All sectors except energy fell intraday, with technology, real estate and industrials leading the decliners.

The CBOE Volatility Index surged 15% to 18.56.

The Institute for Supply Management's US manufacturing index rose to 48.7 in August from 48 in July, versus expectations for 49 in a survey compiled by Bloomberg. The print marks the sixth consecutive month below the breakeven level of 50, according to a Jefferies note.

"Volatile tariff policy, increased uncertainty in the economic outlook, and a massive ebb and flow of imports ahead of tariff implementation have significantly disrupted activity in most manufacturing sub-sectors," Jefferies Chief US Economist Thomas Simons said in the note.

US construction spending fell 0.1% in July, as expected in a Bloomberg-compiled survey and following a 0.4% decrease in June.

The S&P Global US manufacturing index was revised downwards to 53 for August from a flash reading of 53.3, compared with expectations for no revision in a survey compiled by Bloomberg.

Most Treasury yields rose, with the 10-year yield up 5.1 basis points to 4.28% and the two-year rate 3.1 basis points higher at 3.65%.

Gold futures rose 2.1% to $3,588.6, after scaling a new peak of $3,594.0 earlier in the session. Silver futures surged 2.3% to $41.11, after hitting an intraday record of $41.34.

In company news, Kraft Heinz ( KHC ) said its board approved a plan to split the company into two publicly traded entities through a tax-free spin-off. Shares slumped 6.7% intraday, among the steepest declines on the S&P 500 and the Nasdaq.

Nvidia's ( NVDA ) shares dropped 3.2% intraday, among the worst performers on the Nasdaq and the Dow, following reports that Alibaba ( BABA ) is developing its own integrated circuits to replace Nvidia's ( NVDA ) H20 chip.

Biogen (BIIB) and Stoke Therapeutics (STOK) released data from Phase 1/2a and open-label extension studies that support the potential for zorevunersen to be the "first" disease-modifying medicine for Dravet syndrome. Shares of Biogen climbed 3.7% intraday, among the top performers on the S&P 500 and the Nasdaq.

West Texas Intermediate crude oil futures jumped 2.6% to $65.64 a barrel.