U.S. Markets closed
  • S&P Futures

    -8.00 (-0.20%)
  • Dow Futures

    -46.00 (-0.13%)
  • Nasdaq Futures

    -21.75 (-0.18%)
  • Russell 2000 Futures

    -3.10 (-0.16%)
  • Crude Oil

    +0.49 (+0.61%)
  • Gold

    +0.80 (+0.04%)
  • Silver

    +0.09 (+0.39%)

    +0.0011 (+0.1054%)
  • 10-Yr Bond

    -0.0230 (-0.65%)
  • Vix

    -0.78 (-3.93%)

    +0.0028 (+0.2260%)

    -0.8040 (-0.5942%)

    +245.39 (+1.45%)
  • CMC Crypto 200

    +2.91 (+0.72%)
  • FTSE 100

    -2.26 (-0.03%)
  • Nikkei 225

    -448.20 (-1.59%)

Stocks sink in Monday market meltdown; Nasdaq falls 2.6%, Dow drops 640 points

Stocks got drubbed on Monday, falling across the board as this summer's market rally stalled out.

When the closing bell rang on Wall Street, the S&P 500 was down 2.1%, the Nasdaq off 2.6%, and the Dow down 640 points, or 1.9%.

Monday's losses completed the biggest two-day declines for the Nasdaq and the S&P 500 since June. For the S&P 500, Monday marked the index's largest decline since June 16, the date that also marks the market's most recent bottom.

Last week, the major averages lost ground for the first time in four weeks, snapping their longest weekly winning streak since November 2021.

This drop in markets comes ahead of a busy week for economic news with the Federal Reserve's key Jackson Hole symposium set for Friday, the same day investors expect updates on inflation data and consumer sentiment.

WTI crude oil futures were volatile in afternoon trade, with crude falling below $87 a barrel on Monday morning before headlines on possible production cuts from Saudi Arabia sent crude back towards $90 a barrel.

The euro was also trading back below parity with the US dollar as the dollar continues its best year since the late '90s.

Elsewhere in markets on Monday, bitcoin (BTC-USD) was down nearly 2% and threatening to again break $21,000 after cracking this level overnight for the first time since late July.

Crypto markets, which have rallied alongside stocks over the last several weeks, also stalled out on Friday with bitcoin and ethereum (ETH-USD) both losing about 8%.

The 10-year yield, which had declined as bonds rallied with stocks in the early phase of this summer's rebound, was trading above 3% on Monday, its highest level since July 20. The 10-year yield rose about 20 basis points last week amid a broader slide in the stock market.

The latest iteration of the meme trade continued to unravel early Monday, with shares of AMC (AMC) falling 42% on Monday as the company's new preferred share class began trading under the ticker 'APE' (APE).

AMC's preferred units fell 11.9% on Monday to around $6.12 per share. Combine the price of these units with AMC's existing common stock, which closed at $10.45, and investors value the business at $16.52 per share, down around 9% from Friday's closing price closer to $18.

Unlike traditional preferred stock arrangements that typically offer holders additional economic benefits like larger dividends, AMC's new offering has the same voting and economic rights as common shares. AMC announced this new preferred share class on August 4.

An AMC theatre is pictured in Times Square in the Manhattan borough of New York City, New York, U.S., June 2, 2021.  REUTERS/Carlo Allegri
An AMC theatre is pictured in Times Square in the Manhattan borough of New York City, New York, U.S., June 2, 2021. REUTERS/Carlo Allegri

In the weeks since AMC's APE announcement, a rally in several meme stocks — most notably Bed Bath & Beyond (BBBY) — has been the primary non-Fed-driven story in financial markets.

Last week, the Bed Bath & Beyond story began unraveling when Ryan Cohen, chairman at GameStop, Chewy co-founder, and ring leader of the first act of the meme trade back in 2021, disclosed the sale of his entire 11.8% stake in the struggling retailer after a manic rally in shares last week.

This news sent Bed Bath & Beyond shares down 40% on Friday. Bloomberg also reported late last week Bed Bath & Beyond had hired restructuring lawyers and was facing delayed shipments from suppliers over late payments.

Bed Bath & Beyond shares fell 16% on Monday.

This loss of momentum in the market comes ahead of the Fed's key Jackson Hole conference later this week, with Fed Chair Jerome Powell's speech on Friday likely to offer clues on the magnitude of the central bank's next interest rate increase.

Friday morning will also feature the latest reading on PCE inflation, the Fed's preferred measure, as investors look for additional signs inflation pressures may have peaked, a potential positive catalyst for risk assets.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube