Nasdaq leads Wall Street lower after hawkish Fed comments from Reuters

Nasdaq leads Wall Street lower after hawkish Fed comments from Reuters

©Reuters. FILE PHOTO: Raindrops hang from a Wall Street sign in front of the New York Stock Exchange in Manhattan in New York City, New York, U.S. October 26, 2020. REUTERS/Mike Segar/File Photo

By Shubham Batra and Ankika Biswas

(Reuters) – Wall Street’s main indices slid on Monday, with the tech-heavy Nasdaq slipping about 1%, as hawkish comments from a US Federal Reserve official dampened hopes of an easing of the central bank’s aggressive monetary policy stance.

Federal Reserve Governor Christopher Waller, a voting member of the rate-setting committee this year, said Sunday that markets should now look to the “endpoint” of rate hikes, not the pace of each move, and that the endpoint is likely . far away”.

The comments follow a weaker-than-expected inflation report last week, which raised hopes that the Fed might scale back its sharp rate hikes and helped fuel a euphoric market rally.

In the previous session, the Nasdaq posted its biggest weekly percentage gain in about five months, while the tech-heavy Nasdaq posted its best week since March.

The coming week will focus on a range of economic data including Wednesday’s retail sales figures and speeches from several Fed officials for further clues on the outlook for interest rates.

“The market expects the Fed to continue its hawkish rate rhetoric. That could all change once we get more confirmation on inflation in December,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

Traders are now expecting the Fed to hike rates by half a point in December and expect the rate to end in between 4.75% and 5.0% next year.

At 9:42 a.m. ET, the S&P 500 was down 17.25 points, or 0.43%, to 3,975.68 and 115.13 points, or 1.02%, to 11,208.20.

The price fell 7.84 points, or 0.02%, to 33,740.02. Gains in drugmakers like Johnson & Johnson (NYSE:) and Amgen (NASDAQ:) limited the blue-chip index’s decline.

As US Treasury yields rose, technology and growth names such as microsoft corp (NASDAQ:), Apple Inc (NASDAQ:) and Inc (NASDAQ:) slid between 1% and 3%. [US/]

The information technology sector of the S&P 500 fell 1.2% and was among the leading sectoral detractors in the benchmark index.

Tesla (NASDAQ:) Inc fell 3.4% as Chief Executive Elon Musk said “I’ve got too much work on my plate” when asked about his recent acquisition of Twitter and his leadership of the electric vehicle maker.

Chinese leader Xi Jinping and US President Joe Biden met Monday for long-awaited talks, which come as ties between their countries are at their lowest in decades, marred by disagreements over a variety of issues from Taiwan to trade .

Among other stocks, Biogen Inc (NASDAQ:) and Eli Lilly (NYSE:) gained 3.4% and 1.4%, respectively, after Swiss rival Roche failed with its Alzheimer’s drug candidate.

Theater operator AMC Entertainment (NYSE:) rose 6.5% as Marvel’s latest film, Black Panther: Wakanda Forever, grossed $330 million worldwide in its opening weekend Hasbro Inc (NASDAQ:) fell 7.4% after BofA Global Research downgraded the toymaker’s stock.

At a 2.08 to 1 ratio on the NYSE and a 1.65 to 1 ratio on the Nasdaq, bearish issues outweighed the leaders.

The S&P index posted four new 52-week highs and no new lows, while the Nasdaq made 23 new highs and 21 new lows.

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