US Stocks Drop, Headed For Worst Month Since 2012

U.S. stocks opened lower Monday, with the Dow Jones Industrial Average falling 150 points after global shares in Asia saw another volatile trading session. The Standard & Poor's 500 index lost 0.6 percent, headed for its worst monthly decline since 2012, while European markets are on course for their worst monthly loss since 2011.

In the midst of uncertainty surrounding China's economic slowdown, Wall Street is looking ahead to Friday's employment report, which could provide more clues as to the timing of the Federal Reserve's inevitable hike in interest rates.

The Dow Jones Industrial Average (INDEXDJX:.DJI) dropped 150 points, or 0.6 percent, to 16,481.47. The Standard & Poor's 500 index (INDEXSP:.INX) lost 47 points, or 0.6 percent, to 1,978.67. And the Nasdaq composite (INDEXNASDAQ:.IXIC) fell 19 points, or 0.4 percent, to 4,809.

The Shanghai Composite closed Monday’s trading session down 0.8 percent after experiencing a bout of volatility, at one point losing more than 4 percent. The index has lost about 12 percent for the month, and nearly 40 percent since mid-June despite repeated and unprecedented measures by the government to shore up the market.

In afternoon trading, Germany's Dax and the French CAC 40 declined lost 0.7 percent and 0.8 percent, respectively. Both indexes are heading for their biggest monthly loss in four years.

Oil traded nearly 3 percent lower Monday after a brief rally last week saw U.S. crude prices soar more than 10 percent, marking their best day since March 2009. West Texas Intermediate (WTI) crude, the benchmark for U.S. oil prices, dropped 2.6 percent to $44.04 per barrel for October delivery on the New York Mercantile Exchange. On the London ICE Futures Exchange, Brent crude, the global benchmark for oil prices, lost 3 percent to finish at $48.59.

A robust jobs report for August could offer further evidence the U.S. economy is on strong enough footing to absorb the impact of a Federal Reserve interest rate hike this year. Although many economists had expected the Fed to change its monetary policy stance in September, some have pushed out their expectation for beyond this year in light of the recent turmoil in global markets.

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Economists forecast U.S. employers created 220,000 nonfarm payrolls in July, with unemployment to tick down to 5.2 percent, according to analysts polled by Thomson Reuters.

Earlier this month, the financial markets reacted with mixed emotions to the July numbers because the report didn’t completely solidify whether the Fed would actually hike rates in September or hold off until later.

After Friday's jobs report, there is just one more monthly unemployment reading ahead of the Federal Reserve’s next meeting, set for Sept. 16-17.