Stocks slumped again on Monday, sending the S&P 500 stock index to its lowest level of the year, as investors looked to a Federal Reserve decision later this week and limped toward the close of challenging year.
The selling spared few sectors, with tech firms, the health care industry, small companies, and blue chip corporations all falling after survey data suggested some softening in the United States’ outlook for growth.
The pain was particularly acute in the health care sector, as investors digested the decision of a federal judge in Texas who ruled the Affordable Care Act unconstitutional last week. While the decision, which will be appealed, does not immediately upend the law, it does raise new uncertainty for the companies that have established significant businesses structured around the law known as Obamacare.
Centene, an insurer based in St. Louis, Mo., that has built a large business servicing government-funded Medicaid programs, was the worst-performing stock in the S&P 500, tumbling more than 7 percent as trading volume surged. The hospital chain HCA also fell sharply, as any change to the law that resulted in lower levels of insurance would likely result in higher costs for the hospitals.
Elsewhere, some data showed signs of a softening in the American economic outlook. The Empire State manufacturing index, a somewhat limited gauge of economic sentiment among manufacturers in New York State, tumbled sharply. A survey of American home builders also showed sentiment continuing to fall in an area of the economy where rising mortgage rates have hurt affordability and sales.
Such survey data is usually considered less solid than official government economic reports. But with the sell-off in shares — they’re now down roughly 3 percent this year — suggesting an increasingly uncertain outlook for growth and corporate profits, many investors are intensely focused on any economic update that confirms the worrisome signals being sent by stocks as they await the decision of the Federal Reserve this week on whether to raise interest rates.
President Trump sent a Twitter message on Monday calling “incredible” the widespread expectation that the Federal Reserve will raise interest rates when it concludes its monetary policy meeting on Wednesday.
The Fed’s decision will likely be one of the last major events for markets in what has been a befuddling year for investors. For the first time in decades, every major type of investment has fared poorly, as the outlook for economic growth and corporate profits is dampened by rising trade tensions and interest rates.