NEW YORK (AP) — Stocks sank in morning trading on Wall Street Monday, putting the benchmark S&P 500 on track for what the market considers a correction — a drop of 10% or more from its most recent high.
The S&P 500 fell 2.5% to 4,287.22 as of 10:15 a.m. Eastern, and is now down about 10.7% from the high it set on Jan. 4. A close of 4,316.90 or lower will put it into a correction.
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The declines in the market extend a recent run of losses that have left major indexes in a January slump. The Dow Jones Industrial Average fell 712 points, or 2.1%, to 33,544 and the Nasdaq fell 3%.
Investors have been growing increasingly worried about how aggressively the Federal Reserve, which holds a policy meeting this week, might act to cool rising inflation. Wall Street anticipates the first increase in interest rates as early as March, and investors have grown increasingly concerned the Fed will have to raise rates more quickly and more often than the central bank originally indicated.
The Fed’s benchmark short-term interest rate is currently in a range of 0% to 0.25%. Investors now see a nearly 70% chance that the Fed will raise the rate by at least one percentage point by the end of the year, according to CME Group’s Fed Watch tool.
Federal Reserve policymakers will release their latest statement on Wednesday.
On Monday, the energy and raw materials sectors lead to the decline. Mining concern Freeport McMoRan slipped 4.6% and General Motors fell 4%.
Technology stocks were among the heaviest weights on the market as investors shift money away from pricier stocks in anticipation of rising interest rates. Higher rates make shares in high-flying tech companies and other expensive growth stocks relatively less attractive.
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Apple fell 1.7% and Microsoft shed 1.8%.