US stocks continued to decline on Monday, posting their biggest drop in four months. Apparently, investors were concerned over China's real estate sector and potential tapering by the Federal Reserve.

So, the S&P 500 closed 1.7% lower amid sell-offs by investors. And at one point, the index even fell 2.9%, the biggest drop since October 2020.

Meanwhile, dollar and Treasury yields rallied ahead of the Fed's meeting on Wednesday. Members are expected to discuss stimulus cuts at the meeting.

"If the market is ripe for a correction, 'tis the season for one," said Anne Wickland, portfolio manager at Easterly Investment Partners LLC.

JPMorgan strategists Marko Kolanovic also said that the fall in the S&P 500 provided an opportunity to buy stocks.

Meanwhile, Yardeni Research President Ed Yardeni said: "China is not investable, not at this point -- even on a government level because you just really don't know what protection you're going to have or what the currency is going to do."

Aside from Evergrande and potential tapering by the Fed, financial markets also face risks from uncertainty over President Joe Biden's $ 4 trillion economic program and the need to raise or suspend the US debt ceiling. Investors were already concerned about the slowdown in the global economic recovery following the pandemic and inflation fueled by commodity prices.

US Treasury Secretary Janet Yellen said the government will run out of money to pay bills sometime in October if politicians continue to ignore the issue on debt ceiling.

Other important events to watch out for this week are:

- policy decision of the Bank of Japan (Wednesday);

- policy decision of the Federal Reserve (Wednesday);

- policy decision of the Bank of England (Thursday);

- speeches of Jerome Powell, Michelle Bowman and Richard Clarida (Friday).