Investor Fear Increases As Nasdaq Drops Over 100 Points

The CNN Money Fear and Greed index showed further rise in the fear level among investors after the Nasdaq Composite index dropped more than 100 points on Tuesday.

U.S. stocks settled mostly lower on Tuesday, reversing gains recorded earlier during the session as investors awaited key inflation data due this week.

Investors also remained cautious ahead of the start of earnings season. JPMorgan Chase & Co. JPM, Morgan Stanley MS Wells Fargo & Company WFC, and Citigroup Inc. C will report earnings on Friday.

The Dow rose 0.12% to close at 29,239.19 on Tuesday, while the S&P 500 fell 0.65% to 3,588.84. The Nasdaq Composite fell 1.10% to settle at 10,426.19 in the previous session.

Investors are now awaiting earnings results from PepsiCo, Inc. PEP and Wipro Limited WIT, scheduled for release today.

At a current reading of 19.0, the index remained in the "extreme fear" zone, following a previous reading of 20.0.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.