Investing.com– U.S. stocks were in selloff mode Monday as growing concerns over an economic slowdown put squeeze on high-flying technology stocks.
At 14:53 ET (18:53 GMT), the fell 1011 points, or 2.5%, the dropped 3.1%, and the slumped 3.8%.
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 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 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 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…
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