US stocks hve ended sharply lower as a profit warning by Walmart dragged down retail shares and exceptionally weak consumer confidence data also fuelled fears about spending.
Walmart shares sank after the retailer cut its full-year profit forecast late on Monday.
Walmart blamed surging prices for food and fuel, and said it needed to cut prices to pare inventories.
Shares of Target Corp and Amazon.com Inc also dropped.
Data showed US consumer confidence dropped to nearly a one and a half-year low in July amid persistent worries about higher inflation and rising interest rates.
"Walmart basically pulled the plug, and most retailers are lower across the board," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
With this week's coming Federal Reserve decision mostly discounted by the market, the focus is on earnings and data, he said.
The Fed started a two-day meeting and on Wednesday, it is expected to announce a 0.75 percentage point interest rate hike to fight inflation.
Investors have worried that aggressive interest rate hikes by the Fed could tip the economy into recession.
Amazon, which said it would raise fees for delivery and streaming service Prime in Europe by up to 43 per cent a year, was among the biggest drags on the Nasdaq and S&P 500 while consumer discretionary led declines among S&P 500 sectors.
The S&P 500 lost 46.31 points, or 1.17 per cent, to end at 3,920.53 points, while the Nasdaq Composite lost 220.09 points, or 1.88 per cent, to 11,562.58 and the Dow Jones Industrial Average fell 235.98 points, or 0.74 per cent, to 31,754.06.
Meanwhile, Coca-Cola Co gained after the company raised its full-year revenue forecast.
McDonald's Corp rose after beating quarterly expectations.
A busy week for earnings also includes reports from Alphabet Inc and Microsoft Corp after the bell.
Investors have been looking to see if this week's earnings news from mega-cap companies might help the stock market sustain its recent rally.
Earnings from S&P 500 companies are expected to have risen 6.2 per cent for the second quarter from the year-ago period, according to Refinitiv data.
In other company news, 3M Co rose after the industrial giant said it planned to spin off its healthcare business.
General Electric Co gained after the industrial conglomerate beat revenue and profit estimates.
The International Monetary Fund cut global growth forecasts again.