Dow sheds nearly 400 points in worst day since March as economic worries return: Live updates

The Dow Jones Industrial Average fell Tuesday after the latest home sales and consumer confidence reports stoked concern over the state of the U.S. economy.

The Dow lost 388.00 points, or 1.14%, to 33,618.88 in its worst day since March. The 30-stock index closed below its 200-day moving average for the first time since May.

The S&P 500 slid 1.47% to 4,273.53, closing below 4,300 for the first time since June 9. Meanwhile, the Nasdaq Composite pulled back 1.57% to 13,063.61.

Amazon shares fell 4% — the most of the mega-cap tech stocks — after the Federal Trade Commission filed an antitrust lawsuit, saying the online retailer keeps prices artificially high and hurts rivals.

August new home sales missed expectations. Homes under contract totaled 675,000 for the month, down 8.7% from July, according to the Commerce Department. Economists polled by Dow Jones anticipated a total of 695,000, which would have represented a 2.7% fall from unrevised July totals.

The Conference Board’s consumer confidence index fell to 103 in September, down from 108.7 in August. Economists were anticipating 105.5, according to consensus estimates from Dow Jones. The expectations index tumbled to 73.7, below the level that observers associate with recessions.

JPMorgan Chase CEO Jamie Dimon warned interest rates may need to rise further to tamp down inflation, comments that added to bearish sentiment Tuesday. Bank stocks declined, with the SPDR S&P Regional Banking ETF (KRE) falling more than 1%. Wells Fargo shares dropped about 2%, while Morgan Stanley fell 1%.

Those moves would add to the market’s losses for the month. The Nasdaq Composite is down nearly 7% in September, while the S&P 500 and Dow lost more than 5% and 3%, respectively. Among the catalysts dragging stocks lower this month is the Federal Reserve’s warning that it sees fewer rate cuts next year. The news pushed the benchmark 10-year Treasury yield to levels not seen since 2007.

“Investors are still on edge, nervous, about what the rise in bond yields have to say about the economy, about the stock market, about the Fed, as well as the value of the dollar,” said Sam Stovall, chief investment strategist at CFRA Research. “I think investors lack clarity and therefore are deciding to lighten up.”

Investors this week are also grappling with negotiations in Washington, as lawmakers hope to avert a government shutdown that could take place as early as Oct. 1 if Congress doesn’t agree on a spending bill.

Still, upcoming seasonal market tumult could present a window for investors. Though October is known as the “jinx month” because of the 1929 and 1987 crashes, it also has a reputation as a “bear killer,” according to the “Stock Trader’s Almanac.”

— CNBC’s Jeff Cox contributed to this report.