Wall Street ends sharply lower in broad sell-off1 min read . Updated: 21 Sep 2021, 01:55 AM IST
- All eyes on Fed's policy meeting later this week
- All 11 major S&P 500 sectors were lower, with economically sensitive groups like energy down the most
Listen to this article
Wall Street plunged on Monday as fear of contagion from a potential collapse of China's Evergrande prompted a broad sell-off and sent investors fleeing equities for safety.
The Nasdaq fell to its lowest level in about a month, and Microsoft Corp, Alphabet Inc, Amazon.com Inc , Apple Inc, Facebook Inc and Tesla Inc were among the biggest drags on the index as well as the S&P 500.
All 11 major S&P 500 sectors were lower, with economically sensitive groups like energy down the most.
Investors also were nervous ahead of the Federal Reserve's policy meeting this week.
The banking sub-index dropped sharply while U.S. Treasury yields rose as worries about the possible default of Evergrande appeared to affect the broader market.
"You kind of knew that when there was something that caught markets off guard, that it was going to lead to probably a bigger sell-off and you didn't know what the reason would be," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
"I guess it's the China news but... it's not altogether surprising given how bullish people were."
Wednesday will bring the results of the Fed's policy meeting, where the central bank is expected to lay the groundwork for a tapering, although the consensus is for an actual announcement to be delayed until the November or December meetings.
Unofficially, the Dow Jones Industrial Average fell 620.22 points, or 1.79%, to 33,964.66, the S&P 500 lost 75.28 points, or 1.70%, to 4,357.71 and the Nasdaq Composite dropped 325.95 points, or 2.17%, to 14,718.02.
The S&P 500 is down sharply from its intra-day record high hit on Sept. 2 and is on track to snap a seven-month winning streak.
Strategists at Morgan Stanley said they expected a 10% correction in the S&P 500 as the Fed starts to unwind its monetary support, adding that signs of stalling economic growth could deepen it to 20%.
The CBOE volatility index, known as Wall Street's fear gauge, rose.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!