The CNN Money Fear and Greed index showed an increase in the overall fear level, while the index remained in the "Fear" zone on Monday.

U.S. stocks settled lower on Monday, with the Dow Jones index dipping more than 400 points during the session. Large tech stocks fell again on Monday, with shares of Tesla Inc. (NASDAQ:TSLA) declining 3.3% and Meta Platforms Inc. (NASDAQ:META) losing 1.4% during the session.

Although major indices settled lower on Friday, they still recorded gains last week. The blue-chip index gained around 0.4% last week, ending a three-week losing streak, while the S&P 500 added 0.7%. The Nasdaq, meanwhile, rose about 0.8% during the week.

On the economic data front, the Chicago PMI fell to 36.9 in December from 40.2 in November and missing market estimates of 42.5. U.S. pending home sales increased 2.2% month-over-month in November, following a revised 1.8% gain in October and above market estimates of a 0.7% increase. The Dallas Fed's Texas manufacturing activity index rose six points to a reading of 3.4 in December.

All sectors on the S&P 500 closed on a negative note, with consumer discretionary, materials, and healthcare stocks recording the biggest losses on Monday.

The Dow Jones closed lower by around 418 points to 42,573.73 on Monday. The S&P 500 fell 1.07% to 5,906.94, while the Nasdaq Composite dipped 1.19% to close at 19,486.79 during Monday's session.

What is CNN Business Fear & Greed Index?

At a current reading of 27.9, the index remained in the "Fear" zone on Monday, versus a prior reading of 30.8.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.