Major US stock indices slid to start the week on Monday as fears global growth slowed as China's economic recovery lagged and oil prices fell.
The Dow lost about 140 points, or around 0.4%. The S&P 500 was down 0.6% and the Nasdaq Composite was down 1.3%.
The data showed that Chinese economic growth slowed more than expected. China's retail sales rose 8.5% yoy in July, below the 11.5% forecast by economists polled by Reuters. Online sales only increased 4.4% for the month. In the country's manufacturing sector, industrial production rose 6.4%, below the consensus estimate of 7.8%.
The country's National Bureau of Statistics noted the impact of Covid and domestic flooding, saying the country's "economic recovery is still unstable and uneven".
"Delta-driven slowdown is gripping China," CNBC's Jim Cramer said in a tweet. "Not sure about the effects here yet."
Oil prices fell after the Chinese economic data was released. The US oil benchmark West Texas intermediate crude oil futures fell, putting energy stocks under pressure. Occidental Petroleum was down about 4%, Exxon Mobil was down about 2%, and Chevron was down more than 1%.
The benchmark ten-year government bond yield fell to 1.238% as investors worried about global growth. Bond yields fall when their prices rise.
Bank stocks trended lower as the 10-year yield fell. Bank of America, JPMorgan Chase, and Goldman Sachs each lost around 1%.
Technology stocks were also under pressure. Big tech names like Google parent Alphabet, Apple, and Facebook all fell more than 1%.
Retail stocks rose slightly ahead of large companies' quarterly earnings reports. Walmart was up about 1% ahead of its quarterly report scheduled for Tuesday. Home Depot and Lowe's are up this week ahead of the financials.
Tesla shares fell Monday after the National Highway Traffic Safety Administration announced a formal investigation into the electric vehicle maker's semi-automated driving system, Autopilot.
Moderna shares, which are up more than 240% this year, lost more than 6%.
US stocks also pulled back amid growing support from within the Federal Reserve, to announce a tapering of their bond purchases in September and to begin reducing purchases about a month later. Interviews with central bank officials, as well as their public comments, show growing support for a faster timeline for the rejuvenation than markets anticipated a month ago.
The major stock indices hit new record highs last month on the back of robust corporate earnings. The S&P 500 closed at a record high 48 times out of 155 trading days or 31% of the time this year – the most frequent closing highs since 1950.
According to Friday's FactSet, 77 percent of the S&P 500 companies reported positive surprises in earnings per share for the second calendar quarter. If 87% is the final percentage, this is the highest percentage of the S&P 500 companies reporting positive EPS surprises since FactSet started tracking this metric in 2008.
"These are August dog days and low volume and directionless volatility are the order of the day as the 2Q21 profitable season is largely behind us," said Raymond James' Tavis McCourt in a note.
– With reporting from Evelyn Cheng.