US stocks have closed 1 per cent lower as investors consider the health of the consumer economy ahead of quarterly results from retailers this week and a long-delayed US jobs report, while they also brace for earnings from Nvidia later this week.
Losses accelerated in afternoon trading, with the S&P 500 trading below its 50-day moving average - a key technical marker - and on track to close below that level for the first time in months.
Results this week from retail giants Walmart, Home Depot and Target will round out the quarterly earnings season.
Shares of Home Depot, due to report on Tuesday before the bell, were down 1.1 per cent.
Investors eagerly awaited the September jobs report, which is due to be released on Thursday after the long US government shutdown ended last week.
Investors are waiting for two big things: "a look at the consumer ... and Nvidia's earnings," said Adam Sarhan, chief executive of 50 Park Investments in New York, noting that "you have a consumer that is potentially getting weaker, not stronger".
"We have got the market consolidating a very big rally from the April low," he said.
Nvidia to report profits on Wednesday
Nvidia is the world's largest company by market value and at the heart of Wall Street's artificial intelligence trade. It is due to report earnings after the bell on Wednesday. Its shares were down 2.6 per cent on Monday and were the biggest drag on the Nasdaq and S&P 500.
Stocks have been pressured this month by concerns that AI exuberance has driven up valuations to expensive levels.
The Dow Jones Industrial Average fell 475.06 points, or 1.01 per cent, to 46,675.00, the S&P 500 lost 65.25 points, or 0.97 per cent, to 6,668.98 and the Nasdaq Composite lost 237.41 points, or 1.03 per cent, to 22,663.18.
Investors also digested views on the outlook for stocks next year. Brokerage Morgan Stanley expects US stocks to outperform peers next year and prefers global equities over credit and government bonds.
