It took only a fresh report on China's slowing economy to send Wall Street into another nose dive Tuesday, chopping nearly 3 percent off the value of US stocks and dashing hopes that a global sell-off was losing steam.
The Dow Jones industrial average plunged almost 470 points to 16,058.35, fresh on the heels of the index's worst monthly performance in three years.
Other US stock benchmarks fell in similar fashion, after tumbling more than 6 percent in a volatile August.
"I would buckle in, this isn't going to be graceful,'' said Mark Zandi, chief economist at Moody's Analytics in West Chester, Pa.
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A government report showed that manufacturing and factory activity in China slowed in August, adding fuel to concerns that economies around the world could stumble as a result.
Questions about the US Federal Reserve's direction on interest rates, coupled with late-summer vacation absences on Wall Street, also helped set a negative tone for the session Tuesday.
Meanwhile, a US manufacturing report for August showed new orders and production still growing, but at a slower pace.
"We're continuing to grow, we're creating a lot of jobs, " Zandi said. "The fundamentals of the economy are strong. The US economy can continue to drive the global train forward, just as long as China doesn't derail."
But investors did not appear optimistic Tuesday, driving the price of stocks lower at the start of trading and keeping them down for the rest of the day. The Standard & Poor's 500 index fell nearly 3 percent, to 1913.85. The Nasdaq index fell more than 2.9 percent, ending at 4,636.10.
It's unclear how long it could take to sort out China's economic trajectory. The country's reporting of data is often incomplete and even suspect at times, investment managers complain. They say some of the government's recent moves, like the unexpected decision to devalue the Chinese currency, have not inspired confidence.
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Bernard R. Horn Jr., president of Polaris Capital Management, a Boston firm that focuses on global investments, said he is convinced Chinese officials will ultimately make smart moves to keep the world's second-largest economy humming, albeit at a slower pace.
"It's not going to come grinding to a halt,'' Horn said. China still consumes vast amounts of raw materials, like iron ore and copper, he said.
The Shanghai Composite index fell 4.5 percent to 3,024.18 early Wednesday. China's market had closed on Tuesday amid speculation that state-backed funds are using afternoon share purchases to bolster the market before a World War II victory parade on Thursday. China's markets are closed Thursday and Friday.
Another issue: Oil producers worry about slowing demand, even though globally it "has never been higher,'' according to Jeff Mortimer, director of investment strategy at BNY Mellon Wealth Management.
Wide swings in oil prices in recent days have come as investors and producers react to an apparent oversupply of crude. Mortimer said the United States has played a role in the glut, because of the success of fracking to produce natural gas.
"We're not used to seeing oil trade like this,'' he said. US crude oil dove 8.3 percent Tuesday, to $45.12 a barrel. But that followed its biggest three-day rally in 25 years.
Lower oil prices are embraced by some people and feared by others. These are difficult times for producers, for instance, but cheaper energy can help make many businesses more profitable and help consumers save money.
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"That's the bigger picture,'' said Horn. "The reductions in oil and commodities will eventually filter through to the prices consumers pay on retail goods. And that's ultimately very good for consumers."
The volatility of stock and commodity prices isn't making the Fed's job easy, near term. The central bankers want to start slowly moving rates higher to reflect a stronger economy. But they don't aim to make a swooning market worse.
The Fed's policy makers meet in two weeks. The Boston Fed chief, Eric S. Rosengren, told the Globe a period of gradual rate hikes is near.
Investors will watch for a jobs report due Friday. And they can expect more typical trading volume starting next week, when many Wall Street's traders and money managers return to their jobs after the Labor Day weekend.
David Stubbs, global market strategist at JP Morgan Asset Management, wrote in a market report Tuesday that "a lot of the more experienced, more sensible heads are sitting on a beach rather than in the office, which could also be contributing to the sell-off."
Beth Healy can be reached
at beth.healy@globe.com. Follow her on Twitter @HealyBeth.