WASHINGTON (dpa-AFX) - After showing a lack of direction early in the session, stocks moved sharply lower over the course of the trading day on Monday. The major averages all showed notable moves to the downside, falling to their lowest closing levels in a month.
The major averages climbed off their lows going into the end of the day but remained firmly negative. The Dow tumbled 557.24 points or 1.2 percent to 46,590.24, the Nasdaq slid 192.51 points or 0.8 percent to 22,708.07 and the S&P 500 slumped 61.70 points or 0.9 percent to 6,672.41.
The weakness on Wall Street came as valuation concerns resurfaced ahead of the release of quarterly results from Nvidia (NVDA).
The strength of Nvidia's results and its guidance could have a significant impact on the markets amid recent concerns about an AI bubble.
Nvidia, which is due to release its third quarter results after the close of trading on Wednesday, tumbled by 1.8 percent on the day.
'Just meeting expectation won't be enough - investors want the spectre of that AI bubble popping blown clean away,' said AJ Bell head of financial analysis Danni Hewson. 'Nvidia will need to surprise on the upside and provide an update that leaves people in no doubt about the outlook for the sector.'
Traders were also looking ahead to the release of U.S. economic data that was delayed due to the recently ended government shutdown.
The Commerce Department kicked off the release its delayed data this morning with the release of a report unexpectedly showing a modest increase by construction spending in the month of August.
Reports on factory orders and the U.S. trade deficit in August are also due to be released in the coming days along with the monthly jobs report for September.
While the reports will be more backward looking than traders would prefer, the data could still impact the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting in December.
CME Group's FedWatch Tool is currently indicating a 55.1 percent chance the Fed will leave rates unchanged next month and a 44.9 percent chance of another quarter point rate cut.
Sector News
Airline stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 3.7 percent to its lowest closing level in over three months.
Significant weakness also emerged among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index tumbling by 3.4 percent and 2.7 percent, respectively.
Housing stocks also saw considerable weakness, as reflected by the 2.7 percent slump by the Philadelphia Housing Sector Index.
Energy, networking and semiconductor stocks also saw notable weakness, while some strength emerged among utilities stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan's Nikkei 225 Index edged down by 0.1 percent and China's Shanghai Composite Index fell by 0.5 percent, while South Korea's Kospi shot up by 1.9 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index slumped by 1.2 percent, the French CAC 40 Index slid by 0.5 percent and the U.K.'s FTSE 100 Index slipped by 0.2 percent.
In the bond market, treasuries regained ground after moving lower over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.5 basis points to 4.133 percent.
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