The US stocks plunged on Tuesday, following data indicating a pickup in the business activity that sparked concerns that Fed may need to raise interest rates by a larger amount than anticipated to contain inflation.

Th business activity in the US touched its peak in eight months in February, Surging to 50.2 from 46.8 in January. This growth was supported by a strong services sector.

Nasdaq Composite slipped 268.86 points or 2.28% to 11,518.41 while, S&P 500 fell to 78.6 points or 1.93% to 4,000.49 while Dow Jones Industrial Average dipped 649.81 points or 1.92% to 33,176.88.

According to Refinitiv statistics, analysts anticipate that S&P 500 company earnings will edge up by 1.6% in 2023 as opposed to the 4.4% growth anticipated at the beginning of the year.

All 11 of the major S&P 500 sectors had declines, with the consumer discretionary index seeing the biggest drop at 3%.