Bitcoin and gold reached record highs on Tuesday as traders anticipated economic data and central bank movements. Wall Street stocks fell dramatically.
All three major U.S. market indices sank 1% or more, with the tech-heavy Nasdaq falling the most.
"This seems to be a day when bad news is bad news," said Minneapolis-based U.S. Bank Wealth Management national investment strategist Tom Hainlin. We had slow data. It's more about a faltering economy than how many times the Fed will lower rates this year."
Despite stock investors' risk aversion, bitcoin reached and then fell from a record high. Bitcoin closed 7.6% down at $62,380.
"You've had this big run in stocks, and investors are looking to put their money in other areas where they think they can make money," said Horizon Investment Services CEO Chuck Carlson of Hammond, Indiana.
Interest rate drop predictions drove gold to a record high. "We can draw the line from weaker economic data to higher expectations that the Fed will cut interest rates to less support for the dollar, which, in turn supports gold," Hainlin said.
U.S. services sector growth slowed and new industrial orders fell more than projected. The Dow Jones Industrial Average (.DJI) slid 404.64 points, or 1.04%, to 38,585.19, the S&P 500 (.SPX) fell 52.3 points, or 1.02%, to 5,078.65, and the Nasdaq Composite (.IXIC) plummeted 267.92 points, or 1.65%, to 15,939.59.
European equities fell as China's economic stimulus failed to excite investors, who remained wary ahead of euro zone and U.S. economic data and a European Central Bank policy decision. The pan-European STOXX 600 index (.STOXX) fell 0.23% while MSCI's global stock index (.MIWD00000PUS) fell 0.79%.
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