US stocks fall ahead of Fed meeting

US stocks fell on Monday as investors grew cautious ahead of a bumper week of central-bank meetings and corporate earnings.

The S&P 500 was down 52.79 points, or 1.3%, at 4,017.77, while the Dow Jones Industrial Average was down 260.99 points, or 0.8%, at 33,717.09. The Nasdaq Composite fell 227.90 points, or 2%, to 11,393.81.

Stock markets have been volatile in recent weeks, driven by signs that inflation is easing and hopes the Federal Reserve will continue to moderate and eventually stop. US codes It posted solid weekly gains last weekThe S&P 500 added 2.5%, the Nasdaq Composite rose 4.3% and the Dow Industrials rose 1.8%.

In the S&P 500, 48 of last year’s 50 worst-performing stocks have risen this year, averaging 17% gains through January, according to Dow Jones market data. By comparison, 30 of the 50 best-performing S&P 500 stocks over the past year have risen, posting an average advance of less than 1%.

“You see a lot of them come back strongly in January,” said John Queley, chief investment officer at Trillium Asset Management. Mr. Cueley said he has recently added technical levels to some of the strategies.

Investors are gearing up Another important week of corporate decisions, with the returns of more than 100 members of the S&P 500 index. In technology, Spotify And Snap Statement Tuesday,

Facebook

Parents Meta platforms Follows Mercury and sector giants AmazonGoogle Parents letters And Apple Ready to report on Thursday.

“The market has been flying for two weeks. But as we get closer to the Fed meeting, caution is definitely creeping in,” he said. Seema Shah, Chief Global Strategist at Principal Asset Management. “Maybe we’ll see [Fed Chair Jerome] Powell reiterates that they are not done yet.

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Of the 11 sectors in the S&P 500, 10 were in decline to start the trading week. Energy, information technology and communication services were the biggest laggards. Only consumer staples finished in the green.

Central bank officials are expected to raise interest rates by a quarter of a percentage point when their two-day meeting ends on Wednesday, reducing the size of the increase for the second straight meeting. Officials are also likely They need to discuss how far they still have to go A rate hike to control inflation before suspending inflation.

Nevertheless, investors remain cautious about the economy. Central Bank, Mr. Under Powell, inflation remains firmly under control, and many believe the Fed is unlikely to start cutting interest rates as soon as it has done in the past. Some investors worry that prolonged high rates could drag the economy into recession.

US stock indexes have tracked a volatile path in recent weeks.


Photo:

Andrew Kelly/Reuters

“Markets believe that the dark times of 2022 may soon be moving into the rearview mirror,” said Stuart Katz, chief investment officer at Robertson Stephens. Mr. Trump said optimism was premature, reducing the link between investors and the central bank and when to anticipate interest rate hikes. Katz said.

Shares of several major automakers fell on Monday

Ford Motor

It said it will lower prices and increase production of its Mustang electric crossover. Ford shares fell 38 cents, or 2.9%, to $12.89.

Tesla

Shares fell $11.24, or 6.3%, to $166.66, the worst performer on the S&P 500. Deep price cuts across the company’s US lineup this month prompted a backlash from customers, many of whom paid thousands of dollars more for their vehicles just weeks ago.

GE Healthcare Technologies

Shares rose $1.42, or 2%, to $71.50, one of the top five performers on the S&P 500.

The yield on the benchmark 10-year Treasury note rose to 3.550% from 3.517% on Friday. Bonds and prices move in opposite directions.

Surprisingly strong inflation from Spain confused the outlook for interest rates in the eurozone. Both the European Central Bank and the Bank of England are expected Interest rate hike this week, both policy decisions on Thursday. Inflation in Europe has not yet shown the steady decline seen in the US

“There’s a difference between the Fed and the ECB,” said Charles Deibel, head of fixed income at Mediolanum International Funds. “While forward-looking inflation data is moving south in Europe and in the U.S., it’s clear the data hasn’t done that yet.”

In commodity markets, oil prices fell. Brent crude, the international oil benchmark, was down $1.76, or 2%, at $84.90 a barrel.

Foreign stock indices are different. In Europe, the Stoxx Europe 600 fell 0.2%, led by losses in technology companies.

Asian indices were mixed as markets reopened in China and Taiwan following the Lunar New Year holiday. The moves ranged from a 2.7% loss for Hong Kong’s Hang Seng index to a 3.8% gain for Taiwan’s Taix index.

Write to Will Horner at [email protected] and Hardika Singh at [email protected]

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