U.S. equities closed lower Monday as investors weighed a possible Federal Reserve rate hike in December.
"Perhaps it's worries about the legitimacy of the Federal Reserve lifting interest rates and that equity valuations — which have been in full — need to be re-rated," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
The odds of the Fed raising rates for the first time in about a decade rose dramatically after the October nonfarm payrolls report — released Friday — showed the U.S. economy added 271,000 jobs.
According to the CME Group, the probability of a December rate hike rose from about 58 percent to about 70 percent.
U.S. stocks opened lower and soon proceeded to extend losses, with the Dow Jones industrial average falling as much as 242.55 points at its session lows before paring gains slightly ahead of the close.
"I think there was some bargain hunting this afternoon," said Kim Forrest, senior equity analyst at Fort Pitt Capital.
The blue chips index also fell back into negative territory for the year as IBM contributed most of the losses.
Dow Jones industrial average YTDSource: FactSet
The S&P 500 closed down nearly 1 percent lower as consumer discretionary and energy both fell over 1 percent.
"The market giving back here is a reflection of weak growth," said Nick Raich, CEO of The Earnings Scout.
Overnight, China said October exports fell 6.9 percent from a year ago, while imports dropped 18.8 percent, both missing expectations.
"Concerns over global growth and the OECD triggered [the move lower] this morning," said Kate Warne, investment strategist at Edward Jones. "I think you're seeing investors position their portfolios with less risk."
The major indexes posted a six-week winning streak on Friday, gaining at least 1 percent.
"We're coming off a very good week and the narrative has certainly changed in terms of monetary policy," said Art Hogan, chief market strategist at Wunderlich Securities. "We've been too low for too long, and I think the path toward normalization starts in December."
"In short, this is a perfectly normal/healthy pullback," said Adam Sarhan, CEO of Sarhan Capital. "We were long overdue."
"The key going forward is going to be analyzing the pullback."