US stocks fall as investors await earnings, central bank meetings

The major US stock indexes fell on Monday due to the declines in technology and other megacap shares, as investors looked at a major week of events including central bank meetings and a slew of earnings reports.

The heavyweight tech sector dropped 1.9% and the energy sector fell 2.3%, the biggest drop among the S&P 500 sectors. The shares of Apple, Amazon.com and Google parent Alphabet Inc, which are due to post results later this week, have slumped.

More than 100 S&P 500 companies are expected to report results this week, which includes central bank meetings in the United States and Europe and closely watched US employment data.

Keith Lerner, a co-chief investment officer at Truist Advisory Services said the market has had a good run and the trading is cautious heading into a week which is likely to be an inflection point for the overall market.

The Dow Jones Industrial Average fell by 260.99 points, or 0.77%, to 33,717. In 09, the S&P 500 lost 52.79 points, or 1.30%, to 4,017. 77 and the Nasdaq Composite dropped 227.90 points, or 1.96%, to 11,393. After a rough 2022, tech shares that rebounded to a new high in the US Treasury yield increased, giving another pressure to tech shares that have otherwise rebounded to start the year.

The S&P 500 remained on track to post its biggest gain since January, despite Monday's declines.

The US central bank has hiked the funds rate by 25 basis points at the end of its two-day policy meeting on Wednesday, after a 2022 move by the Fed to control inflation.

The news conference will be watched for signs of how long rates could stay elevated, and whether the rate-hiking cycle is coming to a close.

It's probably one of the most important meetings since the whole thing began, said Sameer Samana, senior market strategist at Wells Fargo Investment Institute. If the Fed extends that timeline meaningfully from what the market expects, and that means that the Fed will be done in the next meeting or two, this may end up marking the pause. The European Central Bank is expected to deliver another large rate hike on Thursday.

There are concerns that the economy may be facing a recession, which is why investors are focused on earnings reports. With more than 140 companies reporting so far, S&P 500 earnings are expected to have fallen 3% in the fourth quarter compared to the prior year, according to Refinitiv IBES.

Johnson shares fell by 3.7% after the healthcare giant's strategy to use bankruptcy to resolve the multibillion-dollar litigation over its talc products cause cancer, which was rejected by a federal appeals court.

Declining issues outnumbered advance ones on the NYSE by a 2.40 to 1 ratio, while on Nasdaq, a 2.08 to 1 ratio favors decliners.

The S&P 500 posted 5 new 52 week highs and no new lows. The Nasdaq Composite posted 67 new highs and 20 new lows, while the S&P 500 posted 5 new 52 week highs.

The last 20 sessions saw 10.6 billion shares changed hands in US exchanges, compared to the 11.2 billion daily average.