The Dow Jones Industrial Average fell sharply Monday, in its worst day since June, as the summer rally fizzled out and fears of aggressive interest rate hikes returned to Wall Street.
The Dow fell 642.6 points, or 1.91%. The S&P 500 and Nasdaq Composite dropped 2.13% and 2.55%, respectively. It was the worst day of trading since June 16 for the Dow and the S&P 500.
Those losses come on the back of a losing week, that snapped a four-week winning streak for the S&P 500. Still, the broader market index remains 13% above its June lows.
Investors are anticipating what could be a volatile week of trading ahead of Federal Reserve Chairman Jerome Powell’s latest comments on inflation at the central bank’s annual Jackson Hole economic symposium.
“When you see the market right now dropping down like this, this is the market saying the Fed has to be more aggressive to slow the economy down further” if they want to bring inflation back down, said Robert Cantwell, portfolio manager at Upholdings.
Tech stocks declined on concerns over more aggressive rate hikes from the Fed. Amazon fell 3.6%. Semiconductor stocks dropped with Nvidia down 4.6%. Shares of Netflix were 6.1% lower following a downgrade to sell from CFRA.