U.S. stocks tumbled in early trade Wednesday as investors grappled with a precipitous selloff in Chinese shares, lingering nervousness over Greece and the coming Federal Reserve minutes.
The S&P 500 SPX, -1.15% fell 20 points, or 1% to 2,060. The Dow Jones Industrial Average DJIA, -1.14% dropped 185 points, or 1%, to 17,590. The Nasdaq Composite COMP, -1.36% declined 57 points, or 1.2% to 4,939.
The unofficial start to the earnings season, which comes with Alcoa’s report after the market close on Wednesday, was also weighing on investors’ minds as current estimates point to a decline in earnings and revenues for the second quarter.
Chris Gaffney, president at EverBank World Markets, said a crash in China’s stock market has sent shockwaves though equity and commodity markets.
Read: Howard Gold says China’s stock-market crash is just beginning
“Investors are much more worried about China, Greece and to some extent Iran, than about Fed minutes. I think nobody will bother reading them, as Janet Yellen already said what was in them during the Q&A session after the last meeting,” Gaffney said.
“While U.S. markets are not as overvalued as China was, this still might trigger an overdue correction. And if we do not see a pick up in consumer spending, which ultimately drives the markets, it may turn into a major correction,” Gaffney added.
China selloff: The slump in U.S. market comes against a backdrop of sharp losses in the Chinese stock markets. The Shanghai Composite Index SHCOMP, -5.90% has now shaved off more than 30% of its value over the past month.
Read: China’s government had no reason to intervene in the stock market
Greece is still the word: The Greek debt crisis remains a focus after Tuesday’s Eurogroup meeting and eurozone leaders’ summit concluded without progress on a bailout deal. The EU has now given Athens a deadline of Sunday to produce a credible reform proposal and reach an agreement with lenders, or risk sliding into bankruptcy and a eurozone exit.
Greek Prime Minister Alexis Tsipras told the European Parliament on Wednesday that the government will present a detailed reform list in coming days. Meanwhile, Athens submitted a request for aid through the eurozone’s bailout fund, the European Stability Mechanism.
Greece’s banks and stock markets remained shut on Wednesday, but the Global X FTSE Greece 20 ETF GREK, -3.24% shaved off 2%. European markets traded slightly higher.
