New York (CNN Business) The Dow fell nearly 350 points Tuesday, as stocks finished sharply lower after a key economic report showed that American factory activity fell for a second month in a row in September.

The ISM manufacturing index dropped to 47.8 in September, compared with the Refinitiv consensus forecast of 50.1. A level above 50 marks growth. That was the lowest reading since June 2009 , the last month of the recession, according to the Institute of Supply Management, which puts out the report.

The manufacturing sector shrank for the first time in three years in August, according to the ISM index, which measures month-over-month activity, as the effects of the trade war and slowing global demand set in.

Manufacturers cited the US-China trade war as weighing on demand and making materials more expensive, according to the ISM.

"The disappointing data is only fanning long-standing fears of slowing global growth," said Alec Young, managing director of global markets research at FTSE Russell.

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