President Donald Trump said he would announce a nominee on Friday or Saturday, while Democrats contend the winner of the Nov. 3 election should choose the nominee after the Republican-led Senate in 2016 used that rationale to block a nomination by Barack Obama, following the death of Associate Justice Antonin Scalia.
Investors continued to watch for signs of the much-discussed rotation from high-growth shares to more beaten-down stocks in industries like retail and energy. Tech-related stocks, which had led the market’s rally back from the March pandemic lows, have flagged in recent weeks, leading the market back down from all-time highs.
But Monday’s selloff was led by more growth-sensitive sectors, reflecting the fickle swings in market expectations around an uncertain U.S. economic recovery.
On Monday, Dallas Federal Reserve President Robert Kaplan said the Fed’s new forward guidance could create “excesses” in financial markets. Other central bankers including New York Fed President John Williams will speak throughout the day.
In economic data, the Chicago Fed’s national activity index, which is designed to gauge overall U.S. economic activity, fell to 0.79 in August from a revised 2.54 in the prior month.
The debt burden on the U.S. economy rose at a record pace in the second quarter, with the share of federal government debt soaring 58.9% to $22.58 trillion, as Washington ramped up is response to the pandemic, the Federal Reserve reported on Monday.
Which companies were in focus?
Shares of electric-truck maker Nikola Corp. /zigman2/quotes/208704275/composite NKLA -7.64% dropped 19.3% after founder Trevor Milton resigned as executive chairman, following allegations by a short seller the company had misled investors about its technology.
Oracle Corp . /zigman2/quotes/202180826/composite ORCL +0.61% shares closed up 1.8%, after Trump on Saturday said he had given his “blessing” to a proposed deal that would see the company and Walmart Inc. /zigman2/quotes/207374728/composite WMT -0.15% take over U.S. operations of Chinese-owned app TikTok. Walmart shares rose 1.3%.
Beyond Meat Inc. ’s /zigman2/quotes/211617595/composite BYND +1.88% stock was off 0.2% Monday, after Friday’s downgrade to underweight from neutral from JPMorgan.
Walt Disney Co . /zigman2/quotes/203410047/composite DIS -1.31% shares were 2.5% lower even after it and Lucasfilm said they have teamed up for “Mando Mondays,” a weekly release of new product tied to the blockbuster Disney+ series “The Mandalorian.”
Microsoft Corp. announced the acquisition of ZeniMax Media and its game publisher Bethesda Softworks for $7.5 billion in cash. Shares of Microsoft rose 1.1%.
Airline shares tumbled, with Delta Air Lines Inc . /zigman2/quotes/200327741/composite DAL -0.56% shares the worst hit and off 9.2%. Airlines have been battling renewed fears of more lockdowns, especially in the U.K., and the looming expiration of U.S. government aid to protect airline jobs.
What did other markets perform?
The ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.23% , which tracks the performance of the greenback against its major rivals, jumped 0.7%, paring its year-to-date losses to 3%.
Gold futures /zigman2/quotes/210039572/delayed GCZ20 +0.11% slid 2.% to settle at $1,910.60 an ounce. The U.S. crude oil benchmark /zigman2/quotes/211629951/delayed CL.1 -0.02% slumped 4.4% to end at $39.31 a barrel.
The Stoxx Europe 600 Index /zigman2/quotes/210599654/delayed XX:SXXP +0.41% dropped 3.2%, while the U.K.’s benchmark FTSE /zigman2/quotes/200549425/delayed FR:UKX -0.49% fell 3.4%. In Asia, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.28% fell 2.1% and the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +1.14% fell 0.6%, while Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +0.40% was closed for a public holiday.
<STRONG>William Watts contributed reporting.</STRONG>