Dow slumps 600 points Monday to wrap worst day since June as summer rally fades

CNBC in 5 minutes: All the buy, sell and hold stock calls from Monday
CNBC in 5 minutes: All the buy, sell and hold stock calls from Monday

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 643.13 points, or 1.91%, to 33,063.61. The S&P 500 dropped 2.14% to 4,137.99, and the Nasdaq Composite tumbled 2.55% to 12,381.57, 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, which snapped a four-week winning streak for the S&P 500. Still, the broader market index remains about 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 about 4.6%. Shares of Netflix were roughly 6.1% lower following a downgrade to sell from CFRA.

Lea la cobertura del mercado de hoy en español aquí.

Stocks wrap worst day since June

The Dow Jones Industrial Average fell 643.13 points, or 1.91%, to 33,063.61. The S&P 500 dropped 2.14% to 4,137.99 and the Nasdaq Composite tumbled 2.55% to 12,381.57, respectively. It was the worst day of trading since June 16 for the Dow and the S&P 500.

— Sarah Min

All sectors lower in the S&P 500

All 11 sectors in the S&P 500 were in the red on Monday. Consumer discretionary, communication services and information technology were the biggest losers, as investors dumped shares of cyclical and growth stocks. The sectors were last down 2.8%, 2.7% and 2.6%, respectively.

Energy was the best-performing sector, down 0.85%.

— Sarah Min

Nearly all stocks in the S&P 500 are down

Nearly all members of the S&P 500 were affected by the pullback. During Monday afternoon trading, there were 480 losing stocks, and just 23 members in the green, according to FactSet.

— Sarah Min

S&P 500 headed for worst day in nearly 2 months

Monday's sell-off put the S&P 500 on track for its biggest one-day drop since June 28, when it slid 2.01%. As of 1:13 p.m. ET, the benchmark index was down 1.85%.

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—Fred Imbert

Kolanovic says this is a 'positive environment' for cyclical assets

JPMorgan global strategist Marko Kolanovic is sticking with his bullish view on the U.S. economy and stocks.

"We maintain that inflation will resolve on its own as distortions fade, and likely drive a Fed pivot, while a stronger H2 recovery in China should provide support for the global cycle. This, in combination with still very low investor positioning, creates a positive environment for cyclical assets," Kolanovic wrote in a note to clients on Monday.

Kolanovic has remained bullish through most of 2022 despite the sharp declines for stocks in the first half of the year.

The aggressive selling by investors earlier this year is a key reason why stocks can go higher from here, Kolonovic said.

"Given our core view that there will be no global recession and that inflation will ease, the variable that matters the most is positioning. And positioning is still very low – for both systematic and discretionary funds it is now in the ~10th percentile," Kolanovic said.

— Jesse Pound

Cathie Wood's Ark Innovation ETF falls

Cathie Wood's flagship Ark Innovation ETF continued to fall Monday on the back of a broader decline in growth and tech stocks. The tech-heavy Nasdaq Composite was also down 2%.

The exchange traded fund lost 2% on Monday. Last week, the Ark Innovation ETF fell 14.1% for the week, closing out its first losing week in three and its worst week since February 2021.

The ARK ETF is currently negative for the month, on pace for its ninth monthly loss in 10.

— Sarah Min, Nicholas Wells

NYSE decliners leading advancers 5-1 in market sell-off

The number of declining stocks far outpaced those advancing Monday, as the equity market struggled at the start of the week.

FactSet data show 2,450 New York Stock Exchange-listed stocks fell, while 503 names traded higher. In other words, roughly five stocks declined at the NYSE for every advancer.

—Fred Imbert

Stock market upside is limited, downside risks loom, says Goldman Sachs

Investors hoping for a Federal Reserve pivot from its hawkish rate hikes may have been responsible for the recent rally, but the rebound also resembles a bear market rally, according to Goldman Sachs.

"Performance around bear market rallies and the end of Fed hiking cycles look similar, and ultimately the path of both inflation and growth will determine the market's trajectory through year-end," David Kostin, Goldman's head of U.S. equity strategy, said in a Friday note to clients.

He sees limited upside and potential downside risks ahead, including fears about a recession.

CNBC Pro subscribers can read the full story here.

—Michelle Fox

Euro hits fresh low against the dollar

The euro on Monday fell back below parity with the dollar, notching a fresh low of 0.9926 against the greenback and hitting its lowest level since Dec. 2, 2002.

The dip in the euro came as the dollar index hit 109.097, its highest level since July 14. Meanwhile, the pound stooped to its lowest level against the dollar since March 2020.

The dollar index was last up 0.7% to 108.93, while the euro traded down 0.92% at 0.9942 versus the dollar.

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— Samantha Subin, Gina Francolla

Here are the names making the biggest moves midday

AMC — Shares of the theater chain dropped as investors weighed the company's new preferred share class and news that rival Cineworld that it was considering bankruptcy.

Signify Health — Shares of the home health services provided jumped after The Wall Street Journal and Bloomberg News reported that Amazon is among the bidders for the company.

Ford — Ford shares sank after a jury ruled against the automaker in a case involving a fatal crash that centered on roof strength in one of its older pickup trucks.

Check out our full story here.

—Michelle Fox, Fred Imbert

10-year yield pushes back above 3% for first time in a month

The 10-year Treasury yield is edging higher, as bond traders expect the Federal Reserve's Jackson Hole symposium will send a hawkish message to markets.

The benchmark yield broke above 3% Monday for the first time since July 21. It was at 3.01% in late morning trading.

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Fed Chairman Jerome Powell speaks at the annual Wyoming conference Friday morning at 10 a.m. ET.

Wells Fargo's Michael Schumacher said the market expects Powell to talk tough about raising interest rates, after recent hawkish comments from other Fed officials. Last week, St. Louis Fed President James Bullard, for instance, said he would like to see a third consecutive 0.75 percentage point rate hike in September.

"I'm not convinced he's going to pull out the talons and sound hawkish. I think the fear is he's going to be hawkish." says Schumacher.

--Patti Domm

Ford drops 5% following $1.7 billion verdict

Ford F-150 Lightning at the 2022 New York Auto Show.
Scott Mlyn | CNBC

Ford Motor shares sank 5.4% after a jury on Friday ruled against the automaker in a case focused on the roof strength in one of its older pickup trucks.

A Georgia jury last week ordered the company to pay $1.7 billion to the family of two people killed in a 2014 accident involving the rollover of an F-250 pickup truck.

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— Samantha Subin

Tech shares slide amid rate hike fears

Tech stocks sank on Monday as investors feared more aggressive hikes from the Federal Reserve and investors look ahead to comments from Fed Chair Jerome Powell later this week in Wyoming.

Big technology names Apple, Amazon, and Alphabet fell 1.7%, 3.3%, and 2.4%, respectively, while Netflix sank more than 5%. Semiconductor stocks also took a hit, with Nvidia, Micron and Advanced Micro Devices down more than 2% each.

Popular software names also took a hit, with shares of Atlassian and Datadog each tumbling more than 4%.

— Samantha Subin

Travel stocks slacken

Consumer discretionary underperformed Monday on fears of greater Fed tightening.

Cruise line stocks such as Carnival, Royal Caribbean Group and Norwegian Cruise Line Holdings were lower by 4.4%, 4.4% and 3.6%, respectively.

Airline stocks declined with United Airlines falling 4.8% and Delta Air Lines dropping 4%.

Shares of Wynn Resorts were also down 4.3%.

— Sarah Min

Bitcoin briefly dips below $21,000

Dado Ruvic | Reuters

The value of bitcoin dipped below $21,000 around 4:15 a.m. ET on Monday. The cryptocurrency inched back up to $21,297 by 9:46 a.m., down only 1%, according to CoinMetrics. Ethereum also slid Monday morning to $1,571.35, off more than 3%. 

Bitcoin, which trades 24 hours, had also slipped over the course of the weekend.  

Crypto-linked stocks also stumbled. Shares of MicroStrategy and Riot Blockchain slipped more than 1%.

Declines in virtual currency come at a time when Wall Street's summer rally has begun to fizzle out. The three major indexes began Monday's session with declines, and all three ended the prior week with losses.

 ­-Darla Mercado, Nick Wells

AMC falls more than 30% at the open

An AMC theatre is pictured in Times Square in the Manhattan borough of New York City, New York, June 2, 2021.
Carlo Allegri | Reuters

Shares of AMC were down about 38% in the opening minutes of trading on Monday after rival theater chain Cineworld said it was considering filing for bankruptcy.

AMC's new preferred share class called "APE" units are also scheduled to begin trading on Monday. The shares were distributed as a dividend to existing shareholders and could be a tool for AMC to raise money in the future.

Because the APE unit dividend resembles a stock split, the move could be putting pressure on AMC's common shares this morning.

— Jesse Pound

Stocks open lower Monday

Stocks opened lower Monday as the summer rally waned ahead of the Federal Reserve's Jackson Hole symposium. The Dow Jones Industrial Average fell 376 points, or by 1.12%. S&P 500 and Nasdaq Composite dropped 1.29% and 1.42%, respectively.

— Sarah Min

VIX at highest level since Aug. 3

A measure of stock volatility called the VIX rose to its highest level since Aug. 3.

The Cboe Volatility Index climbed 2.6 points to 23.16 on Monday, though it is still off its recent high when it spiked above 30 in June.

— Sarah Min

Powell will be 'meaningfully more hawkish' at Jackson Hole, Wolfe Research says

Jerome Powell at Jackson Hole, Wyoming, August 24, 2018.
David A. Grogan | CNBC

Federal Reserve Chairman Jerome Powell will likely take an aggressive stance against inflation in his Jackson Hole speech on Friday, according to Wolfe Research.

"We expect Powell to sound more hawkish at Jackson Hole," Wolfe Research's Chris Senyek wrote in the Monday note.

"As we've previously discussed at length, we believe that Fed would have to hike the fed funds rate to 4.5%+ to set inflation on a sustainable path back toward the FOMC's long-term 2% target," he added.

The research firm said the central bank is "behind the curve," and outlined reasons why it's not buying into the bull case, including slowing global growth and inflated earnings expectations.

— Sarah Min

AMC shares sink as Cineworld weighs filing for bankruptcy

AMC Entertainment shares cratered more than 32% in the premarket amid news that Cineworld, which owns U.S. movie theater chain Regal Cinemas, is considering filing for bankruptcy.

The stock move came ahead of the launch of AMC's "APE" preferred equity units on Monday.

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— Samantha Subin