Nasdaq leads Wall Street lower after hawkish Fed comments By Reuters

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

By Shubham Batra and Ankika Biswas

(Reuters) – Major Wall Street indexes fell on Monday, with the tech-heavy Nasdaq down around 1%, as hawkish comments from a U.S. Federal Reserve official dampened hopes that the central bank to tone down its aggressive approach to monetary policy.

Federal Reserve Governor Christopher Waller, a voting member of the rate-setting committee this year, said Sunday that markets should now pay attention to the “end point” of rate hikes, not the pace of each move, and that the end point was probably “far away”.

The comments follow a weaker-than-expected inflation report last week, which had fueled hopes that the Fed could scale back its steep interest rate hikes and helped drive a euphoric market rally.

The prior session’s price posted its biggest weekly percentage gain in about five months, while the tech-heavy Nasdaq posted its best week since March.

Over the coming week, the focus will be on a slew of economic data, including Wednesday’s retail sales numbers, as well as speeches from several Fed officials for further clues about the outlook for interest rate.

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

Traders now expect the Fed to raise interest rates in December by half a point and expect the terminal rate to be between 4.75% and 5.0% for the year. next.

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

The was down 7.84 points, or 0.02%, at 33,740.02. Gains by drugmakers including Johnson & Johnson (NYSE:) and Amgen (NASDAQ:) limited declines in the blue chip index.

As US Treasuries yields edged higher, tech and growth names such as Microsoft Corp. (NASDAQ:), Apple Inc (NASDAQ:) and Inc (NASDAQ:) slipped between 1% and 3%. [US/]

The S&P 500’s information technology sector fell 1.2% and was among the leading sectors to decline in the benchmark.

Tesla (NASDAQ:) Inc fell 3.4% as Chief Executive Elon Musk said ‘I have too much work on my plate’ when asked about its recent Twitter acquisition and leadership of the automaker of electric vehicles.

Chinese leader Xi Jinping and US President Joe Biden met on Monday for long-awaited talks that come as relations between their countries are at a decades-old low, marred by disagreements over a host 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’s Alzheimer’s drug candidate failed.

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

Falling issues outnumbered advances by a 2.08-to-1 ratio on the NYSE and a 1.65-to-1 ratio on the Nasdaq.

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

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