In case you're wondering what happened to this morning's strong rally; at 6:45 am (pdt), exactly when stocks began selling off, Markit's U.S. Manufacturing Purchasing Managers Flash (advanced [i.e., 85% complete]) Index for August was released.
It came in below 50 (albeit barely at 49.9 [a 10-yr low]), which denotes contraction -- and is the lowest reading in 10 years:
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Per or reporting of late, we've been seeing this (general weakness) developing in our macro index.
Stocks bottomed at around 8am and have been battling their way back ever since; no doubt on the prospects that data like this morning's will make for an easier Federal Reserve. Tomorrow's speech by Chairman Powell could be short-term huge for markets.
Interesting, however, while stocks have battled back to near-even (from yesterday's close), the VIX (tracks implied volatility on S&P 500 Index options) has stayed elevated. Suggesting that options traders are (at the moment) bracing for Powell disappointing the market come tomorrow.