The US stock market was lower on Monday as investors shifted gears after considering the possibility that the US Federal Reserve may take longer to cut interest rates.
After data showed last week that services activity was strong in January as well as strong job growth, traders are watching speeches by Fed officials this week, including Chair Jerome Powell on Tuesday, for any change in the central bank's rhetoric.
People had to reassess what the outlook for the Fed and the economy was after the blowout jobs report. It will be interesting to see if Powell continues his transformation from hawk to dove tomorrow, said Brian Jacobsen, senior investment strategist at Allspring Global Investments.
The United States may avoid a recession as inflation is coming down while the labor market remains strong, according to US Treasury Secretary Janet Yellen.
After taking a hit in 2022, US equity prices have rebounded strongly in 2023 due to megacap growth stocks, amid short-lived hopes that the Fed will temper its rate hikes, which in turn could relieve pressure on equity valuations.
Money market participants now see the benchmark rate at 5.1% by July, in line with what most policymakers have backed.
The yield on the 10 year US Treasury note extended gains to a four week high.
Analysts expect the S&P 500 firms' quarterly earnings to decline 2.8% in the fourth quarter, according to Refinitiv.
The Dow Jones Industrial Average was down 35.85 points, or 0.11%, at 33,890. The S&P 500 lost 25.44 points, or 0.62%, to 4,111, at the end of the day. The Nasdaq Composite dropped by 119.51 points, or 1%, to 11,887 on 04 and the Nasdaq Composite. The US exchange volume was 11.17 billion shares, compared with the 11.858 billion average for the full session over the last 20 trading days.
Tyson Foods Inc fell 4.6% after missing analysts' estimates for quarterly revenue and profit.
Miner Newmont Corp fell by 4.5% on its $16.9 billion offer for Australian peer Newcrest Mining Ltd to build a global gold behemoth.
After a US jury found Elon Musk and his company were not liable for misleading investors when Musk said in 2018 that he had funding to take the electric-vehicle maker private, Tesla Inc rose 2.5%.
Late in the session, meme stocks, such as AMC Entertainment and Gamestop, also gained steam, ending 11.8% and 7.2% higher.
US-listed Chinese stocks such as Pinduoduo Inc fell 1.9% on geopolitical concerns after a US military fighter jet shot down a suspected Chinese spy balloon off the coast of South Carolina on Saturday.
Most of the 11 major S&P 500 sector indexes were in the red, except for utilities and consumer staples.
Declining issues outnumbered advancing ones on the NYSE by a 3.37 to 1 ratio, on Nasdaq, a 1.98 to 1 ratio favoring decliners.
The S&P 500 had 5 new 52 week highs and 1 new lows, and the Nasdaq Composite posted 79 new highs and 19 new lows.