U.S. stock indexes fell sharply on Monday during the European session amid growing concerns about an economic slowdown, with technology stocks being hit the hardest.

Fear of economic slowdown hits Wall Street

The sharp losses in Wall Street futures came after U.S. stock markets had been rattled the previous week on fears of a possible economic slowdown.

A series of poor readings increased concerns that the Federal Reserve had kept interest rates at high levels for too long, and that the odds of a soft landing for the economy were slipping.

This notion came to a head on Friday after July’s nonfarm payrolls data missed estimates by a wide margin, signaling a significant cooling in the labor market.

Although the data raised hopes for further interest rate cuts by the Federal Reserve, it dampened the appetite for risk-linked assets.

Technology stocks, which benefited greatly from the positive tone at the beginning of the year, have been significantly affected. The NASDAQ Composite, with a strong technology component, has lost close to 10% from its all-time high at the beginning of the year, entering correction territory.

More economic data

More economic data will be released on Monday, including the ISM Services PMI for July. San Francisco Fed President Mary Daly will also speak at a conference after the close of business on Monday.

Investors will be looking for more signals regarding the strength of the world’s largest economy after Friday’s jobs report heightened fears of a recession.

The volatility index for U.S. stocks, the VIX, surpassed the 40 level early Monday, reaching its highest level since October 2020, Bloomberg reports.

The index has surged nearly 79%, the biggest rise on record since February 2018, and has reached its highest intraday level in four years.

Currently, markets are forecasting a nearly 78% chance that the Fed will cut rates by September, possibly by up to 50 basis points.

High-profile earnings follow

Most major companies have already reported their results, although some high-profile results are expected in the coming days.

Caterpillar (CAT), the industrial leader, and Uber Technologies (UBER), the ride-sharing company, will release their results on Tuesday.

Super Micro Computer (SMCI), which saw a considerable valuation spike due to artificial intelligence hype, will also release its results on Tuesday, along with media giants Walt Disney (DIS) and Warner Bros.

Crude oil falls as a result of growth concerns

Crude oil prices fell on Monday, trading near eight-month lows due to growing concerns about the economic slowdown in the United States, the world’s largest crude oil consumer.

Weak U.S. economic data from the previous week has hit sentiment in crude oil markets, as estimates of a recession in the world’s largest economy are negative for future demand. Recent inventory data indicated that increased travel demand during the early summer had kept gasoline consumption high.

This comes on top of disappointing growth figures from China, the world’s largest oil importer, and surveys indicating weaker manufacturing activity in Asia and Europe, adding to concerns about future oil consumption.