(RTTNews) - Stocks have moved sharply lower during trading on Monday, extending the pullback seen during last Friday's session. The tech-heavy Nasdaq has shown a particularly steep drop.

Currently, the major averages are off their worst levels of the day but still firmly negative. The Nasdaq is down 553.33 points or 2.8 percent at 19,400.97 and the S&P 500 is down 104.36 points or 1.7 percent at 5,996.88.

The narrower Dow is posting a more modest loss, edging down 69.54 points or 0.2 percent at 44,354.71.

The sell-off On Wall Street comes amid substantial weakness among technology stocks, with AI darling and sector leader Nvidia (NVDA) is plummeting by 14.4 percent.

The plunge by Nvidia comes after Chinese startup DeepSeek's AI Assistant overtook rival ChatGPT to become the top-rated free application available on Apple's App Store in the United States.

DeepSeek's ascendance has doubt on Silicon Valley's hefty AI capex spending and the sustainability of the U.S. technical edge in artificial intelligence.

"Potentially, this technology could be a game-changer, and questions are being asked about the huge amounts of money the traditional tech players, the so-called Magnificent 7, have been ploughing into AI development," said ING.

With Nvidia leading the way lower, semiconductor stocks are seeing considerable weakness, dragging the Philadelphia Semiconductor Index down by 7.9 percent.

Significant weakness is also visible among networking stocks, as reflected by the 6.5 percent plunge by the NYSE Arca Networking Index.

Outside of the tech sector, utilities, natural gas and gold stocks are also seeing significant weakness, while pharmaceutical and housing stocks have shown strong moves to the upside on the day.

Concerns about the outlook for interest rates may also be weighing on Wall Street ahead of the Federal Reserve's monetary policy meeting next week.

While the Fed is almost universally expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Recent economic data has led to concerns about the Fed leaving rates on hold for a prolonged period, but many economists still expect the central bank to resume cutting rates sometime in the first half of the year.

CME Group's FedWatch Tool is currently indicating a 78.0 percent chance rates will be lower by at least a quarter point following the Fed's June meeting.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index slid by 0.9 percent, while Hong Kong's Hang Seng Index climbed by 0.7 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is down by 0.3 percent, the French CAC 40 Index is marginally higher and the U.K.'s FTSE 100 Index is up by 0.1 percent.

In the bond market, treasuries have shown a strong move to the upside amid the sell-off on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.8 basis points at 4.555 percent.