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* U.S. Treasury bond curve inverts for 1st time since 2007
* Macy's slides after FY outlook cut; weighs on rivals
* Rate-sensitive banks slump
* Indexes down: Dow 1.55%, S&P 1.52%, Nasdaq 1.76% (Updates to open)
By Medha Singh
Aug 14 (Reuters) - Wall Street main indexes slid 1.5% on Wednesday, as a closely watched U.S. bond market indicator pointed to a renewed risk of recession following poor economic data from Germany and China.
Yields on the two-year Treasury notes rose above the 10-year yield for the first time since 2007, a metric widely viewed as a classic recession signal.
The interest-rate sensitive bank index slipped 2.50% and the broader financial sector fell 1.95% in response.
Slumping exports sent Germany's economy into reverse in the second quarter, while Chinese industrial output growth cooled to a more than 17-year low in July, putting the focus back on a bruising U.S.-China trade war and its impact on global growth.
The downbeat mood followed a rally in Wall Street's main indexes on Tuesday thanks to the Trump administration's decision to delay tariffs on some Chinese imports.
"It's almost as if global investors either don't buy the tariff delay as a sign of real progress in the U.S.-China trade war or have been too consumed by further evidence of global economic weakness to care," BMO Capital Markets strategist Stephen Gallo said.
At 9:52 a.m. ET, the Dow Jones Industrial Average was down 406.73 points, or 1.55%, at 25,873.18, the S&P 500 was down 44.61 points, or 1.52%, at 2,881.71. The Nasdaq Composite was down 140.86 points, or 1.76%, at 7,875.50.
The high-growth technology sector was the hardest hit. Shares of Apple Inc were down 1.74% after boosting markets a day earlier with a 4% rise.
Chipmakers were also down, with the Philadelphia chip index slumping 2.09%.
The biggest decliner on the S&P 500 index was Macy's Inc , down 17.2%, after the department store operator cut its full-year profit forecast as it discounted heavily to clear excess spring season inventory.
Rivals Target Corp and Nordstrom Inc slipped 3.4% and 9.8%, respectively.
Declining issues outnumbered advancers for a 5.40-to-1 ratio on the NYSE and for a 5.99-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and 35 new lows, while the Nasdaq recorded eight new highs and 126 new lows. (Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Anil D'Silva)
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