US Stocks Fall Sharply Ahead of Year's Turn

US stocks fell sharply on Monday, extending the pullback from Friday despite the halt in the selloff for US Treasuries as markets assessed the Fed’s policy outlook for next year.

The three main averages were more than 1% lower.

Trading volumes remained thin ahead of the New Year’s holiday on Wednesday, but investors await the ISM Manufacturing PMI due Friday for more hints on whether factory activity deteriorated further enough to warrant less restrictive borrowing costs by the Fed.

Tech shares led the losses with pressure from Nvidia and Amazon, trimming the sector’s rally that carried the surge in US equity indices this year.

In turn, Boeing sank 5% after one of the company’s 737-800 aircraft operated by Jeju Air crashed over the weekend.

The S&P 500 and the Nasdaq 100 are due to close the year 27% and 30% higher, respectively, while the Dow’s larger composition of defensive stocks and lower exposure to speculative tech stocks left the index on course for a softer 14% gain.