The CNN Money Fear and Greed index showed some improvement in the overall market sentiment, while the index remained in the “Greed” zone on Tuesday.

U.S. stocks settled lower on Tuesday, with the Dow Jones falling around 250 points during the session as investors turned risk-off amid mounting concerns over lofty valuations, seasonal headwinds and fiscal strains.

All major indices recorded gains for August. The 30-stock Dow gained more than 3% in August, while the S&P 500 recorded around 2% surge. The tech-heavy Nasdaq also gained around 1.6% during the month.

On the economic front, the S&P Global manufacturing PMI came in at 53.0 in August, compared to the preliminary reading of 53.3 and versus 49.8 in July. U.S. construction spending declined by 0.1% month-over-month to an annual rate of $2,139.1 billion in July. The ISM manufacturing PMI rose to 48.7 in August compared to 48.0 in the previous month, but came in short of market estimates of 49.0.

Nio Inc. (NYSE:NIO) shares gained around 3% on Tuesday after the company reported fiscal second-quarter results. Signet Jewelers Limited (NYSE:SIG) reported better-than-expected earnings for the second quarter on Tuesday.

Most sectors on the S&P 500 closed on a negative note, with industrials, real estate and information technology stocks recording the biggest losses on Tuesday. However, energy and health care stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by around 249 points to 45,295.81 on Tuesday. The S&P 500 fell 0.69% to 6,415.54, while the Nasdaq Composite dipped 0.82% at 21,279.63 during Tuesday's session.

Investors are awaiting earnings results from Dollar Tree Inc (NASDAQ:DLTR), Campbell’s Co (NASDAQ:CPB) and Salesforce Inc (NYSE:CRM) today.

What is CNN Business Fear & Greed Index?

At a current reading of 61.6, the index remained in the “Greed” zone on Tuesday, versus a prior reading of 60.9.

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.

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