Nasdaq leads Wall Street lower after hawkish Fed comments

  • Technology and growth stocks fall as yields rise
  • Biogen, Lilly stand up for failure of Roche’s Alzheimer’s drug
  • Indexes in decline: Dow 0.02%, S&P 0.43%, Nasdaq 1.02%

Nov 14 (Reuters) – Wall Street’s major indexes fell on Monday, with the tech-heavy Nasdaq down around 1%, as hawkish comments from U.S. Federal Reserve officials dampened hopes that the central bank will ease its aggressive approach to monetary policy.

Federal Reserve Governor Christopher Waller, a voting member of this year’s rate-setting committee, said on Sunday that markets should now be paying attention to the “end point” of a rate hike, rather than the pace of any move, and that the end point is likely ” far”.

The comments followed last week’s softer-than-expected inflation report, which fueled hopes that the Fed could scale back its hefty rate hikes and helped fuel a euphoric market rally.

The S&P 500 posted its biggest weekly percentage gain in about five months in the previous session, while the tech-heavy Nasdaq (.IKSIC) posted its best week since March.

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In the week ahead, the focus will be on a range of economic data, including Wednesday’s retail sales numbers, as well as speeches from several Fed officials for further clues on the outlook for interest rates.

“The market expects the Fed to continue its hawkish rhetoric on rates.” That could all change when we get additional inflation confirmations in December,” said Peter Cardillo, chief market 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 in the range of 4.75%-5.0% next year.

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

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The Dow Jones Industrial Average (.DJI) fell 7.84 points, or 0.02%, to 33,740.02. Gains in drugmakers including Johnson & Johnson ( JNJ.N ) and Amgen ( AMGN.O ) capped declines in the blue-chip index.

As U.S. Treasury yields rose, technology and growth names such as Microsoft Corp ( MSFT.O ), Apple Inc ( AAPL.O ) and Inc ( AMZN.O ) fell between 1% and 3%.

The information technology sector of the S&P 500 (.SPLRCT) is down 1.2% and among the leading sector decliners on the benchmark index.

Tesla Inc ( TSLA.O ) fell 3.4% as CEO Elon Musk said “I have too much to do” when asked about his recent acquisition of Twitter and his leadership at the electric vehicle maker.

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 their lowest level in decades, marred by disagreements over a range of issues from Taiwan to trade.

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Among other stocks, Biogen Inc ( BIIB.O ) and Eli Lilly ( LLI.N ) rose 3.4% and 1.4%, respectively, after the failure of Swiss rival Roche’s ( ROG.S ) Alzheimer’s drug candidate disease.

Theater operator AMC Entertainment jumped 6.5% as Marvel’s latest film “Black Panther: Wakanda Forever” earned $330 million globally in its opening weekend, while Hasbro Inc ( HAS.O ) fell 7.4% after BofA Global Research downgraded the toy maker’s stock rating.

Declining issues outnumbered advancing ones by a ratio of 2.08 to 1 on the NISE and 1.65 to 1 on the Nasdaq.

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

Reporting by Shubham Batra, Bansari Maiur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shounak Dasgupta

Our Standards: Thomson Reuters Trust Principles.


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