04:25 PM EDT, 09/03/2024 (MT Newswires) -- US benchmark equity indexes saw sharp losses Tuesday after two reports showed the manufacturing sector stayed in contraction in August.

The Nasdaq Composite slid 3.3% to 17,136.3, while the S&P 500 dropped 2.1% to 5,528.9. The Dow Jones Industrial Average fell 1.5% to 40,936.9, retreating from its record closing on Friday. Among sectors, technology saw the steepest decline, down 4.4%. Only consumer staples and real estate posted gains.

US markets were closed Monday for Labor Day.

In economic news, the US manufacturing sector remained in contraction last month as demand weakness weighed on new orders, according to data from the Institute for Supply Management and S&P Global ( SPGI ) .

"(The Federal Reserve's) rate cuts will help, but it is looking more and more like it's going to take more than a handful of (25-basis-point) moves to get manufacturing going again," Jefferies said in a note to clients.

The ISM and S&P Global's ( SPGI ) US services sector data for August are scheduled to be released Thursday.

The US 10-year yield fell 6.7 basis points to 3.84% Tuesday, while the two-year rate dropped 4.7 basis points to 3.88%.

In company news, Intel ( INTC ) shares slumped 8.8%, the worst performer on the Dow and among the steepest decliners on the Nasdaq. The chipmaker could be removed from the Dow as a sharp drop in its share price this year has made it the worst performer on the index, Reuters reported Tuesday, citing analysts and investors.

On Sunday, Reuters reported, citing an unnamed source, that Intel ( INTC ) Chief Executive Pat Gelsinger is planning to put forth a plan later this month to potentially divest certain businesses and change capital spending priorities.

Chip-making giant Nvidia's ( NVDA ) shares fell 9.5%, among the worst performers on the S&P 500 and the Nasdaq.

Boeing ( BA ) saw the second-steepest drop on the Dow, down 7.3%, as Wells Fargo downgraded its rating on the plane maker's stock to underweight from equal weight and adjusted its price target to $119 from $185.

Tilray Brands ( TLRY ) closed its acquisition of craft breweries Hop Valley Brewing, Terrapin Beer, and Revolver Brewing from Molson Coors Beverage ( TAP/A ) .

Separately, Bloomberg reported, citing a company memo, that Molson Coors ( TAP/A ) is scrapping some of its corporate diversity programs, joining other major corporations in pulling back from diversity, equity and inclusion policies.

Molson Coors ( TAP/A ) shares rose 5.4%, the best performer on the S&P 500, while Tilray fell 1.8%.

S&P 500 companies' latest quarterly earnings have increased by a double-digit percentage from a year earlier in what has been a "better-than-expected" reporting season that's nearly wrapped up, Oppenheimer Asset Management said in a note to clients.

West Texas Intermediate crude oil retreated 4.4% to $70.35 a barrel Tuesday. "Oil prices tumbled as sluggish economic growth in China heightened demand concerns," D.A. Davidson said in a note to clients.

Gold fell 0.2% to $2,523.40 per troy ounce, while silver declined 2.6% to $28.39 per ounce.