U.S. stocks plunge on Fed rate hike uncertainties

U.S. stocks suffered big losses Monday, as uncertainties about the timing of U.S. interest rate hikes weighed on Wall Street sentiment.

The Dow Jones Industrial Average dropped 312.78 points, or 1.92 percent, to 16,001.89. The S&P 500 shed 49.57 points, or 2.57 percent, to 1,881.77. The Nasdaq Composite Index tumbled 142.53 points, or 3.04 percent, to 4,543.97.

New York Federal Reserve President William Dudley said Monday that the Fed remains on track for a likely rate hike this year.

On Thursday, Federal Chair Janet Yellen said she anticipated a rate hike in the coming months.

"Most FOMC (the Federal Open Market Committee) participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter," she said at the University of Massachusetts.

On the economic front, the U.S. Commerce Department said Monday that U.S. personal income in August increased 0.3 percent and personal consumption expenditures rose 0.4 percent.

Analysts said that the better-than-expected increase in consumer spending in August added to the case for an interest rate hike this year.

Meanwhile, the U.S. Pending Home Sales Index decreased 1.4 percent to 109.4 in August from 110.9 in July, remaining at a healthy level of activity, the National Association of Realtors reported Monday.

Adding more pessimism to the market, overseas stock markets also decreased broadly Monday.

With the IMF's possible decision to lower world economic growth previsions for 2015 and 2016 due to bad economic situation, European shares witnessed sharp declines Monday, with French benchmark index CAC 40 diving 2.76 percent.

In Asia, Tokyo shares also tumbled as investors remained cautious ahead of a series of economic data due out later this week, with the 225-issue Nikkei Stock Average going down 1.32 percent. Endit