Investing.com– U.S. stocks traded in sell-off mode on Monday as growing concerns about an economic slowdown pressured high-flying technology stocks.
At 12:45 ET (16:45 GMT), the was down 854 points, or 2.2%, the was down 2.4% and the was down 2.7%.
Slowdown fears hit Wall Street, but economic data show underlying strength
The sharp losses followed last week's sell-off on fears of an economic slowdown.
A series of weak readings raised concerns that the Federal Reserve had kept interest rates high for too long and that chances of a soft landing for the economy were fading.
That idea gained prominence on Friday after July data missed expectations by a wide margin, signaling a substantial cooling in the labor market.
While the data raised hopes that the Federal Reserve will make further interest rate cuts, it dampened appetite for risk-driven assets.
“We now expect faster cuts because the funds rate looks more clearly inappropriately high; the Fed is looking back, having worried too much about inflation for too long and held steady in July; and the logic for cutting now includes the more urgent priority of supporting the economy,” Goldman Sachs said in a recent note.
Still, Monday's economic data suggests a recession is not on the immediate horizon, as the July ISM services PMI met economists' estimates and prices paid, a gauge of inflation, also surprised to the upside.
Federal Reserve speech in the spotlight
Federal Reserve speakers will be closely watched this week as investors have priced in aggressive rate cuts. The president of the Chicago Fed said Monday that the central bank is prepared to respond to signs of economic weakness, hinting that current interest rates may be too prohibitive.
Asked whether a weakening labor market and manufacturing sector could prompt Fed action, Goolsbee avoided committing to a specific path but said it makes no sense to maintain a “tight” policy stance if the economy is weakening.
San Francisco Federal Reserve President Mary Daly was also scheduled to speak Monday.
Markets are now pricing in a 78% chance that the Fed will not only cut rates in September, but ease them by 50 basis points.
Apple leads the fall
Apple (NASDAQ:) shares fell more than 5% after Warren Buffett's decision Berkshire Hathaway (NYSE:) shed nearly half of its stake in the iPhone maker as part of a broader stock sale.
Nvidia (NASDAQ:) shares fell 5% after reports of a delay in the launch of the chipmaker's upcoming artificial intelligence chips due to design flaws.
Lucid Group Inc (NASDAQ:) fell 2% just ahead of its second-quarter results, which are due out after the close on Monday.
BioNTech (NASDAQ:) shares fell more than 2% after the drugmaker's second-quarter earnings missed estimates amid a continued decline in sales of its COVID-19 vaccine.
High-profile gains continue
Most large-cap companies have already reported their results, but some high-profile earnings results are still expected in the coming days.
The industrial benchmark Caterpillar (NYSE:) and ride-hailing major Uber Technologies (NYSE:) are scheduled to file on Tuesday.
Super Micro Computer (NASDAQ:), which saw a significant valuation increase due to enthusiasm for artificial intelligence, will also be listed on Tuesday, while major media outlets Walt Disney Co. Disney (NYSE:) and Warner Bros Discovery (NASDAQ:) will launch on Wednesday.
(Peter Nurse and Ambar Warrick contributed to this article.)
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=();t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)(0);s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);
