Wall Street looks set to start the first trading session of the week on a markedly negative note, extending the downward momentum from Friday.

The past week’s sell-off was led by tech stocks and this is reflected in the 2.7% weekly plunge by the Nasdaq Composite Index. The 30-stock Dow Industrials clocked a more modest 0.16% drop.

Much of the market weakness was back-end loaded last week, with stocks coming in for particular punishment on Friday amid massive options expiry.

The correction appears more technical in nature as the six-week rally off the bottom stalled, Navellier Associates' Louis Navellier said in a note. The fund manager also pinned the predicament on the $2 trillion options expiry.

At the time of going to press on Monday, the Dow futures and S&P futures were down 0.82% and 1.05%, respectively. The Nasdaq 100 futures were plunging 1.37%.

Fundamentals remain largely the same, Navellier said.

“Profit taking after a major rally is to be expected and presents a buying opportunity in strong earners that are swept into the correction,” the market expert said.

On the economic front, investors would get to digest the results of a business activity survey. The Chicago Federal Reserve is set to release its national activity index for July at 8:30 a.m. ET. In June, the index was at -0.19, suggesting a contraction in activity.

Caution is likely to be the watchword for the week ahead of the annual meeting of central bankers in Jackson Hole on Thursday and Friday.

Navellier noted fears around the global tightening theme getting reinforced at the informal Fed event, weakening the forecasts for a pivot to lower rates next year.

WTI crude oil futures have recovered in New York trading and are back above the $90-a-barrel market, potentially lifting energy stocks.

Signify Health, Inc. (NYSE:SGFY) is jumping on M&A rumors.

The major Asian markets retreated on Monday, although the Chinese, Singaporean, and New Zealand markets bucked the downtrend. China received support from the People’s Bank of China’s decision to trim the key lending rates yet again. A week after an unexpected cut, the central bank reduced the five-year loan prime rate from 4.45% to 4.30% and the one-year loan prime rate from 3.70% to 3.65%.

European stocks are also seen plunging, in line with the overall negative market sentiment seen across the globe.