Nasdaq drops 2% as US stocks fall ahead of earnings and inflation data

• US stocks closed lower to start the week, losing steam after last week's modest rally.
• A wave of companies will kick off quarterly earnings season starting this week.

US stocks closed lower to start the week, with the Nasdaq Composite slipping by over 2% as investors get ready for earnings to roll in and await key inflation data set to be released midweek.

Tech shares led stocks lower for the day, with losses accelerating among the major indexes as the session wound down. Quarterly earnings season begins this week, and investors are watching closely for any impact related to domestic inflation and a strengthening dollar.

On Wednesday, markets will get a look at Consumer Price Index data, indicating how hot inflation was running in June. May's report showed prices rising at a rate of 8.6% year-over-year in May, the fastest pace in 41 years. There are some signs that inflation is easing, especially in some corners of energy and commodities markets, but June CPI is still expected to be elevated.

"Inflation is 'public enemy number one' and that will continue to drive fears that the Fed will aggressively tighten policy and send the US economy quickly into a recession," wrote Edward Moya, senior markets analyst at Oanda, adding that this week is particularly important for investors ahead of the Federal Reserve's next meeting at the end of the month.

Here's where US indexes stood after the 4 p.m. closing bell on Monday:

• S&P 500: 3,854.47, down 1.15%

• Dow Jones Industrial Average: 31,175.52, down 0.52% (162.63 points)

• Nasdaq Composite: 11,372.60, down 2.26%

Soaring energy prices have been a boon for Russia even as sanctions look to cut off oil and gas profits. The nation's current account surplus stood at a record $70.1 billion at the end of last quarter and was $138.5 billion in the first six months of the year.

BlackRock warned in its mid-year outlook that the US central bank will probably throttle an economic rebound as it looks to tackle inflation. The world's largest asset manager said the Fed is going about fighting high prices the wrong way and that it'll only adjust after the bad news is already here.

In crypto, most large bitcoin miners operating in Texas have paused operations as the state braces for potential rolling blackouts. Meanwhile, Bloomberg reported Monday that the founders of defunct crypto hedge fund Three Arrows Capital have not been cooperating with liquidators and their whereabouts are not currently known.

Oil prices were lower but pared losses after being down as much as 4%. WTI was down about 1%, trading at $103.71. Brent, oil's international benchmark, slipped 0.3% to $106.67.

Gold eased less than 1%, trading at $1,730.20 per ounce. The 10-year bond yield plunged 11.6 basis points to 2.985%.

Bitcoin fell nearly 2% to $20,488.