NEW YORK (TheStreet) -- U.S. stocks suffered heavy losses in volatile trading Monday ahead of the highly anticipated monthly release of jobs numbers on Friday.

The S&P 500 was down 2.2%, the Dow Jones Industrial Average declined 1.4%, and the Nasdaq fell 2.6%. The Volatility Index, otherwise known as the "fear index,: spiked 17.2% to 27.69.

The number of jobs added to the U.S. economy during September will be released on Friday. Economists expect 200,000 jobs to have been added to nonfarm payrolls over the month, up from 173,000 in August. The unemployment rate is forecast to remain steady at 5.1%.

"The bias is going to be on the weak side until that [jobs] number comes out," Don Townswick, director of equities at asset management firm Conning, told TheStreet. "That's going to be the next thing that drives markets in one direction or another."

Downbeat sentiment over the Federal Reserve's decision to keep interest rates at crises levels continued into the new week.

"The biggest impact on the market is the implied lack of confidence shown by the Fed and that's something that has been affecting the market on a daily basis since they decided not to tighten," added Townswick. "We're seeing some confidence eroding a little bit and that's a bad thing for the market."

Benchmark indexes have been under pressure since the Fed opted to leave rates unchanged during its September meeting citing global market volatility as the main reason. The decision rattled investors who feared that the domestic and global economy was in worse shape than initially thought. The S&P 500 fell more than 1% over the past week.

The central bank will likely hike rates this year, New York Fed President William Dudley said at an event on Monday. However, he said that any decision would not be based on "calendar guidance."

"It depends on the data," he said. A year-end hike is "based on my view of how the economy is likely to evolve."

Meanwhile, Chicago Fed President Charles Evans made the case for a later rate hike in a speech at Marquette University on Monday afternoon. Evans said that normalizing monetary policy too soon would be risky for inflation and "subdued" wage growth. He also said inflation challenges presented by lower energy prices and a stronger U.S. dollar would likely not ease until the middle of 2016.

IMF Managing Director Christine Lagarde, in a newspaper interview, said that a forecast of 3.3% growth in the global economy this year wasn't likely and that next year's 3.8% GDP target was unrealistic. Lagarde noted that slowing growth in emerging economies and China was the culprit.

More weak data from China was also pressuring markets. Industrial profits in the world's second-largest economy fell 8.8% in August. The sharp decline followed on from a 2.9% drop in July. Since the beginning of the year, industrial profits have declined 1.9%.

The health care sector closed out its worst week in four years on Friday. The industry has been under pressure since Democratic presidential candidate Hillary Clinton vowed to address "price gouging" in the industry last Tuesday following the price increase of parasitic infection drug Daraprim from $13.50 to $750 a dose.

Gilead Sciences (GILD) - Get Report , Pfizer (PFE) - Get Report  and Celgene (CELG) - Get Report were extending losses on Monday. The iShares Nasdaq Biotechnology ETF (IBB) - Get Report fell 6% and erased year-to-date gains

Separately, five people have been charged with insider trading of Gilead, according to the Securities and Exchange Commission. Two advisers and one accountant, among others, allegedly traded on confidential information before news of Gilead's acquisition of Pharmasset became public. 

Valeant Pharmaceuticals (VRX) plummeted more than 11% on reports U.S. House Democrats had asked to subpoena the company for documents related to drug price increases. This is the latest move in the government's attempts to regulate the industry.

Whole Foods Market (WFM) shares were on watch after the grocery chain said it would cut around 1,500 jobs over the next two months. This round of job cuts represents around 1.6% of Whole Foods' total work force.

General Electric (GE) - Get Report was down 1.6% after it announced it will move production of gas-powered engines to Canada from Wisconsin after the company failed to access funds from the U.S. Export-Import Bank. Congress let government-run loan agency Ex-Im expire earlier this month.

Apple (AAPL) - Get Report shares were on watch after the company announced Monday it sold more than 13 million new iPhone 6s and iPhone 6s Plus models in the first three days since they were made available over the weekend. This marks a new record for opening weekend sales. 

Alcoa (AA) - Get Report will split into two businesses: an aluminium and mining company and a special metals group. The split is expected to be completed in the second half of 2016 and is part of a long-term strategy rather than activist investor pressure.

Pending home sales fell 1.4% in August as rising prices and fewer properties dampened demand. Economists had expected sales to increase 0.4%. However, the measure still remains 6.1% higher than a year earlier.

Consumer spending in the U.S. increased by 0.4% in August, driven by robust car sales and growth in back-to-school purchases. The measure was slightly higher than an expected 0.3% increase. Personals income rose 0.3% in August, according to the Commerce Department, which was slightly weaker than a 0.4% forecast.