Stock market news live updates: Nasdaq drops 2% as technology stocks slide, Facebook sheds 5%

Emily McCormick · Reporter
8 min read

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Stocks sank on Monday as traders awaited new economic and earnings data this week to confirm or assuage concerns over supply chain challenges, inflation and the pace of the labor market's recovery.

The S&P 500 sank by more than 1%. Last Friday, the first day of October and the fourth quarter, the blue-chip index logged its best start to the month since 2007 with a jump of 1.2%. Still, the index posted a weekly loss of 2.2%, or its worst since February, after an equity rout earlier in the week.

The Nasdaq underperformed against the other two major indexes, dropping more than 2% as Treasury yields climbed. The benchmark 10-year yield hovered just below 1.5%, with the rise in rates sparking a drop in Big Tech and growth names. Facebook shares dropped by 4.9%, while Amazon shares turned negative for 2021 to date.

Stocks are struggling to regain footing after a September selloff, given that many of the concerns that sparked last month's drop have persisted. In Congress, lawmakers have yet to come to an agreement on a solution to raise the debt limit and avert a potential government default, or an outcome that could come as soon mid-month and engender "a financial crisis and economic recession," Treasury Secretary Janet Yellen warned last week.

Jitters over ongoing supply chain disruptions and fast-rising inflation have also been in focus, especially after Friday's U.S. personal consumption expenditures (PCE) report reflected the fastest annual rise in inflation since 1991. And later this week, traders will receive the Labor Department's monthly jobs report for September, which is expected to show an at least modest acceleration in job growth after a much weaker-than-expected August report. But after a strong string of economic data earlier this year, many pundits are bracing for decelerating growth and potential data disappointments into year-end.

"We are going to have to sort of tiptoe our way through some of the negative numbers that we will likely see, but I think the market will look across this valley," Sam Stovall, U.S. equity strategist for CFRA Research, told Yahoo Finance Live on Friday.

And though only a handful of companies are reporting quarterly earnings results this week, the prints will help set the tone ahead of the formal start of third-quarter earnings season with the big banks next week.

As of Friday, consensus analysts on Wall Street projected earnings growth of just over 27% for the S&P 500 for the third quarter, according to FactSet. That would represent a marked slowdown from the second quarter's 88% pace, but still come in as the third highest year-over-year growth rate since 2010 for the index.

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