S&P 500 plunges 3% into correction territory ahead of key Fed meeting and tech earnings

• The S&P 500 dropped into a correction on Monday ahead of the Fed's meeting this week.
• Earnings reports from Microsoft and Apple are also due this week.

US stocks tumbled again Monday, with the S&P 500 falling as much as 3% to enter a correction as investors braced for the Federal Reserve to sharply tighten monetary policy to tame hot inflation, while major tech companies were set to report earnings this week.

The S&P 500 during Monday's session marked an 11% decline from its record high of 4818.62, which was logged just two weeks ago on January 4. Six of its 11 sectors were down by more than 2%, led by the energy group as oil prices slumped.

The Dow Jones Industrial Average was close to a correction, down by 9.4% from its all-time high of 36,952.65, notched on January 5. The Nasdaq Composite entered a correction last week with its drop of more than 10% from a recent high.

Here's where US indexes stood after 10:30 a.m. on Monday:

• S&P 500: 4,311.22, down 1.9%

• Dow Jones Industrial Average: 33,759.83, down 1.48% (505.54 points)

• Nasdaq Composite: 13,417.75, down 2.55%

This Wednesday, the Fed will release its first policy decision of the year. And with inflation near 40-year highs, the central bank is set to ramp up interest rates soon and draw back further on its emergency monetary response to the pandemic.

Traders expect the Fed to increase rates four times this year, starting in March with a 25-basis-point increase. But some analysts believe policymakers could move even more quickly. Goldman Sachs economists said the Fed may hike rates at every meeting from March on — or seven increases in total.

The next wave of big tech earnings is on deck, with Microsoft, Tesla, and Apple set to report this week.

Monday's losses come after the S&P 500 and the Nasdaq Composite last week notched their worst weeks since March 2020, when the COVID-19 outbreak battered global financial markets. The S&P 500 last week fell nearly 6%, and the Nasdaq tumbled by nearly 8%.

Around the market, the crypto market shrank after another $350 billion was wiped out over the weekend, with bitcoin at a six-month low.

Oil prices fell. West Texas Intermediate crude dropped 1.6% to $83.78 per barrel. Brent crude, the international benchmark, lost 1.3%, falling to $86.72.

Gold edged up 0.3% to $1,836.70 per ounce. The 10-year yield fell 4 basis points to 1.71%.

Bitcoin sank 8.2% to $33,336.60.