The stock market had a rough start to the week.
On Monday, tech stocks were slammed with the tech-heavy Nasdaq dropping 1.6% as the Dow lost 1% and the S&P 500 dropped 0.6% after all the major indexes opened the day sharply higher.
The hardest-hit stocks on Monday were some of the FAANG names that have defined the market’s post-election rally, notably Amazon (AMZN), which fell as much as 8% during the depths of Monday’s sell-off before closing down 6.3%. As of Monday’s close, Amazon shares are now down just less than 25% from their all-time high.
Netflix (NFLX) and Nvidia (NVDA), which fell 5% and 6%, respectively, on Monday were also big among the hardest-hit tech names to start the week and both stocks are now down more than 30% from their record highs hit earlier this year.
On Tuesday, the big event will be earnings out of Facebook (FB), which are set for release after the market close. Wall Street analysts expect the company to report adjusted earnings per share of $1.85 on revenue of $13.8 billion, according to estimates from Bloomberg. Facebook shares dropped 2.2% on Monday and are down 35% from their record highs hit in the summer.
Investors will also be closely watching for any outlook on the company’s expenses and revenue growth, which disappointed in the second quarter and lead to a sharp drop in Facebook shares from which the stock has not recovered. Expenses are expected to grow 50%-60% compared to last year and revenue growth rates were expected to decelerate in the second half of the year.
Elsewhere on the calendar on Tuesday, other notable companies reporting earnings are expected to include General Electric (GE), Mastercard (MA), Aetna (AET), Coca-Cola (KO), Under Armour (UAA), Pfizer (PFE), and eBay (EBAY).
And on the economic data side, investors on Tuesday will get the latest S&P/Case-Shiller report on home prices in the morning as well as The Conference Board’s latest reading on consumer confidence.
The story for markets on Tuesday, however, isn’t likely to vary from what we saw on Monday or what has come to define the month of October — markets under pressure. With Monday’s close in the red, the S&P 500 is now down 17 of the last 21 trading sessions.
The S&P 500 is now just 60 points away from the lows hit in February and again in April, with the daily trading action continuing to suggest a meeting with the 2,851 lows from earlier this year is in the cards.
“When looking at the broader market, it looks to us like this rolling bear is quickly turning into a cyclical bear,” said Michael Wilson, a strategist at Morgan Stanley. “Nearly half of all the stocks in the MSCI US Equity Index have now fallen at least 20% from their 52 week high. This isn’t as bad as 2015 or 2011 — the last time the S&P fell close to 20% — but the momentum suggests we may be on our way to those levels if things don’t stabilize soon.”
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland