Investing.com-- The Dow plunged more than 1000 points Monday as growing concerns over an economic slowdown put the squeeze on high-flying technology stocks.
At 16:00 ET (20:00 GMT), the Dow Jones Industrial Average fell 1033 points, or 2.6%, the S&P 500 dropped 2.9%, and the NASDAQ Composite slumped 3.4%.
Slowdown fears batter Wall Street, but economic data shows underlying strength
These hefty losses followed on last week's selloff on fears of an economic slowdown.
A string of weak readings ramped up concerns that the Federal Reserve had kept interest rates at elevated levels for too long, and that chances of a soft landing for the economy were fading.
This notion came to a head on Friday after nonfarm payrolls data for July missed expectations by a wide margin, indicating a substantial cooling in the labor market.
While the data did drive up hopes for more interest rate cuts by the Fed, it drained any appetite for risk-driven assets.
"We now expect faster cuts because the funds rate looks more clearly inappropriately high; the Fed looks behind, having worried too much about inflation for too long and held steady in July; and the rationale for cutting now includes the more urgent priority of supporting the economy," Goldman Sachs said in a recent note.
Still, economic data on Monday suggest a recession isn't on the immediate horizon as July ISM Services PMI beat economists' estimates, and the prices paid, a gauge of inflation, surprised to the upside.
Fed speak in focus
Federal Reserve speakers will be closely watched this week as investors priced in aggressive rate cuts ahead. Chicago Federal Reserve President Austan Goolsbee stated on Monday that the central bank is prepared to respond to signs of economic weakness, hinting that current interest rates may be too prohibitive.
When asked about whether a weakening labor market and manufacturing sector might prompt action from the Fed, Goolsbee avoided committing to a specific course but mentioned it doesn’t make sense to maintain a "restrictive" policy stance if the economy is softening.
San Francisco Fed president Mary Daly was also due to deliver remarks on Monday.
Markets now price in a 78% chance the Federal Reserve will not only cut rates in September, but ease by a full 50 basis points.
Some on Wall Street aren't sure, with Morgan Stanley saying in a recent that "there is clear evidence of cooling, it is still too noisy to justify a 50bp cut in September."
Apple leads rout, Google in legal woe
Apple (NASDAQ:AAPL) stock fell over 4% after Warren Buffett's Berkshire Hathaway (NYSE:BRKb) unloaded nearly half of its stake in the iPhone maker as part of a broader selloff of stocks.
Alphabet (NASDAQ:GOOGL), meanwhile, fell more than 6% after a Federal judge on Monday ruled that Google is "monopolist" and violated antitrust laws in search and text advertising markets.
Nvidia (NASDAQ:NVDA) stock fell 7% after reports of a delay in the launch of the chipmaker’s upcoming artificial-intelligence chips due to design flaws.
Lucid Group Inc (NASDAQ:LCID) slipped 4% just ahead of its second-quarter results due after the closing bell Monday..
BioNTech (NASDAQ:BNTX) stock fell more than 4% after the drug maker’s second-quarter earnings fell short of estimates amid a continued slide in sales of its COVID-19 vaccine.
High profile earnings continue
Most of the mega cap companies have already reported, but there are still some high-profile earnings results expected in the coming days.
Industrial bellwether Caterpillar (NYSE:CAT) and ride sharing major Uber Technologies (NYSE:UBER) are due on Tuesday.
Super Micro Computer (NASDAQ:SMCI), which saw a major valuation spike on hype over artificial intelligence, is also due on Tuesday, while media majors Walt Disney (NYSE:DIS) and Warner Bros Discovery (NASDAQ:WBD) are due on Wednesday.
(Peter Nurse, Ambar Warrick contributed to this article.)