U.S. stocks dropped Monday, as recent economic data fueled speculations that the Federal Reserve will begin raising interest rates as from September.
The Dow Jones Industrial Average dipped 114.98 points, or 0.69 percent, to 16,528.03. The S&P 500 lost 16.69 points, or 0.84 percent, to 1,972.18. The Nasdaq Composite Index shed 51.82 points, or 1.07 percent, to 4,776.51.
Investors were still sifting through the strong gross domestic product (GDP) report released Thursday. The U.S. Commerce Department revised up its estimate for the country's GDP growth in the second quarter to 3.7 percent, which is much higher than the 0.6-percent growth in the first quarter.
A separate report from the department showed that U.S. personal income in July increased 0.4 percent and personal consumption expenditures increased 0.3 percent after an upwardly revised 0.3 percent rise in June.
Federal Vice Chairman Stanley Fischer said Friday that it was too early to determine whether last week's market turmoil would impact the likelihood of a rate hike next month.
He added in a Saturday speech that U.S. inflation was likely to rebound, which allows for a gradual increase in rates.
Meanwhile, the Chicago Business Barometer held on to most of July's gain, falling to 54.4 in August from 54.7 in July, according to the ISM-Chicago Business Survey Monday.
Oil prices surged for the third straight session Monday, with the U.S oil jumping nearly 9 percent, which bolstered the energy sector and buttressed the stock market for further decline.
Lifted by the spiking oil prices, the energy sector rose 1.05 percent Monday, the only advancer among the S&P 500's ten sectors.
Overseas, Chinese shares saw a weak performance Monday, with the benchmark Shanghai Composite Index dipping 0.82 percent to finish at 3,205.99 points, as the government intensifies efforts to crack down on market manipulation.
For the month, all three major indices suffered big losses, with the Dow, the S&P 500 and the Nasdaq plunging 6.6 percent, 6.3 percent and 6.9 percent, respectively.