Against the backdrop of a noticeable increase in the yield of 10-year Treasury bonds, major Wall Street indices dropped by 1% or more. Investors are anxiously weighing their options, facing the realities of long-term interest rate increases and its economic repercussions.

Since the last March crisis, the Dow hasn't experienced such fluctuations. The three major indices ended the trading day, setting record lows for the past three months.

The looming shadow intensifies with the anticipation of a partial US government shutdown. Moody's warns: the country's creditworthiness is at stake.

All this is happening against the backdrop of unsettling news from the Federal Reserve, which last week provided aggressive rate forecasts.

Brad McMillan of the Commonwealth Financial Network says, "We're adjusting to the realities of high rates. The market might be truly overheated, and investors are sensing danger."

Here are the numbers: Dow Jones fell by 388 points, settling at 33,618.88, the S&P 500 lost 63.91 points, ending at 4,273.53, and Nasdaq dropped 207.71 points to close the day at 13,063.61.

All sectors of the S&P 500 ended the day in the red. Tech stocks dropped by 1.8%, while utilities and real estate went down by 3.05% and 1.8% respectively.

And the final note of the day: the CBOE Volatility Index, also known as Wall Street's "fear gauge," reached a peak not seen since the end of May.

Market leaders' stocks are falling, while the financial world anticipates fresh data

On Tuesday, Megacap stocks, which had previously bolstered the indices, trended downward. Particular attention was drawn to a 4% drop in Amazon.com shares following the announcement of an antitrust lawsuit by the US Federal Trade Commission against the internet giant.

Immediately after the market closed, the focus turned to the financial reports of Costco, known for its warehouse retail format. Meanwhile, food distributor Whole Foods, the company United Natural Foods, posted results exceeding profit expectations, but its shares dropped by 19%.

In the meantime, Alibaba, the Chinese e-commerce titan, announced its intention to list shares of its logistics business, Cainiao, on the Hong Kong Stock Exchange. After this move, Alibaba will retain control of over 50% of Cainiao's shares.

Investors are holding their breath in anticipation of Friday's consumer price data, which will provide insight into the current inflation scenario. Additional fresh details are expected on durable goods orders, the second-quarter gross domestic product, and statements from key figures of the Federal Reserve, including its Chairman, Jerome Powell.

Among interesting corporate news: Immunovant shares surged an impressive 97% after positive data on their experimental antibody therapy, which exceeded expert expectations.

On the NYSE, declining stocks significantly outpaced advancers, with a ratio of 5.9 to 1. On this day, the New York Stock Exchange recorded 37 new all-time highs and 388 new lows.

On the Nasdaq, decliners dominated with a falling-to-rising ratio of 2.1 to 1. The exchange noted 35 new record highs and 390 lows for the day.

Trading volume on US exchanges reached 10.2 billion shares, aligning with the average volume for the past 20 days.

On Tuesday, oil markets were under pressure: oil prices declined due to growing concerns about economic growth in China, the world's largest oil importer. New issues in China's real estate market, sparked by the debt slump of construction firm China Evergrande Group, were among the causes. In light of this, the financial world is awaiting the publication of key business activity index data for China in September in the coming days, to better understand the potential implications for the economy.