Nasdaq, S&P 500 fall 3% each amid U.S. recession fears, Apple drop

NEW YORK (Reuters) -- U.S. stocks ended with steep losses on Monday, leaving the Nasdaq and S&P 500 down at least 3% each as the market extended last week's sell-off amid U.S. recession worries and as Apple shares fell sharply on news that a big investor had cut its stake.

All three major indexes registered their biggest three-day percentage declines since June 2022, and the Nasdaq and S&P 500 closed at their lowest levels since early May.

The recession fears shook global markets and drove investors out of risky assets following weak economic data last week, including Friday's soft U.S. payrolls report.

Investors worry that the economy is losing steam more rapidly than anticipated and that the Federal Reserve erred by keeping interest rates steady at its last policy meeting.

Shares of Apple fell 4.8% after Berkshire Hathaway halved its stake in the iPhone maker. Billionaire investor Warren Buffett also let cash at Berkshire soar to $277 billion.

Nvidia, Microsoft and Alphabet also slid, while the Cboe Volatility index, Wall Street's "fear gauge," had its highest close since Oct. 28, 2020. All 11 of the S&P 500 sectors fell, led by declines in technology.

Chicago Fed President Austan Goolsbee downplayed recession fears but said Fed officials need to be cognizant of changes in the environment to avoid being too restrictive with interest rates.

"Today we're seeing a sell-off as an extension of that anxiety that was felt last week," said Neville Javeri, portfolio manager and head of the Empiric LT Equity team at Allspring in Washington.

It "started off with the jobs data last week, and it clearly led to the belief that the Fed needs to start being more proactive around where those unemployment numbers are going," he said.

The Dow