NEW YORK: Wall Street stocks ended lower on Monday (Nov 14), stumbling after last week’s rally fuelled by hopes the Federal Reserve (Fed) would ease its interest rate increases, and as fresh policymaker comments failed to reassure markets.
The Dow Jones Industrial Average fell 211.16 points, or 0.63%, to 33,536.70, the S&P 500 lost 35.68 points, or 0.89%, to 3,957.25 and the Nasdaq Composite dropped 127.11 points, or 1.12%, to 11,196.22.
Equities jumped late last week after official data showed US inflation logged its lowest annual jump since January, boosting hopes the Fed might ease off its aggressive interest rate increases, and perhaps not raise rates as much as anticipated.
Fed Vice chair Lael Brainard (pic) said on Monday it would likely be “appropriate soon” for the central bank to slow the pace of rate increases.
However, with inflation still hovering at its highest level in recent decades, Brainard said the Fed still has “additional work to do both on raising rates” and tamping down prices.
Nick Reece of Merk Investments noted that big swings like those seen in major stock indices last week can happen in a bear market.
“I don’t think this is a rally that you can really believe in. So I feel like the path of least resistance is still lower,” he told AFP.
“There is still a sensitivity to Fed speak ... one was a little hawkish, one was a little dovish,“ said Eric Kuby, chief investment officer at North Star Investment Management Corp.
More Fed officials are due to speak later this week along with a slew of data, including on retail sales and housing, and earnings reports from major retailers.
“It just makes sense the market wants to pause and really both try to make sense of the trajectory (of Fed policy) and what the next drivers are going to be,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.
Investors are awaiting earnings reports from major retailers including Walmart, Target and Home Depot, which will serve as a proxy for consumer demand. – AFP, Reuters
