Stocks finish lower after two weeks of gains: Stock market news today

Wall Street stocks inched down on Tuesday as traders returning from a long weekend grappled with oil prices' highest levels in over a year and fresh data showing China's economy is still struggling to recover.

The S&P 500 (^GSPC) fell about 0.4%, while the Dow Jones Industrial Average (^DJI) lost around 0.6%. The tech-heavy Nasdaq Composite (^IXIC) ended a bit lower than the flatline, reversing earlier losses.

The three major gauges were coming off a winning week that saw the S&P 500 book its best weekly performance since June, as a stream of economic updates fed hopes that the Federal Reserve would hold off from hiking interest rates at its September meeting.

Data out Tuesday showed China’s services activity fell to its lowest level in eight months in August, reviving worries about recovery in the world's second-biggest economy — and what that means for demand globally.

Meanwhile, WTI crude oil (CL=F) ended the day at nearly $87 a barrel, its highest close since November 2022.

Amid the downturn debate, analysts at Goldman Sachs cut their odds of a US recession given cooling inflation and a still-resilient labor market. Plus, they played down the idea that a long drag from the Fed's rate-hiking campaign will push the economy into a severe slowdown.

With a light earnings and economic calendar ahead, the focus will likely stay on the Fed this week, when investors looking at seasonal forces in play for stocks may well find fewer reasons to be cheerful. September has historically been a downbeat month for markets.

That said, some analysts believe September may not be as bad as expected, pointing to factors such as excitement around AI, cash on the sidelines, and Apple's rumored new iPhone release.

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