Stock market today: US stocks close lower as early rate cut hopes fade
US stocks dipped on Monday after Federal Reserve Chair Jerome Powell put a chill on prospects for an early interest rate cut, raising the stakes for a packed week of corporate earnings to keep the recent rally alive.
The S&P 500 (^GSPC) ended the session down 0.3%, signaling a slight pullback from the benchmark’s record-setting run. The Dow Jones Industrial Average (^DJI) shed about 0.7% while the tech-heavy Nasdaq Composite (^IXIC) fell 0.2%.
Stocks slumped after a rollercoaster week that ended in weekly wins thanks to a blowout January jobs report and strong high-profile earnings updates. Those high spirits took a knock after Powell, in a “60 Minutes” interview that aired Sunday, doubled down on his midweek message that the central bank will tread cautiously in deciding when to cut rates. He said the “danger of moving too soon is the job’s not quite done” in quelling inflation.
That prompted traders to scale back their bets on rate cuts — not just for March, but in May too, per the CME FedWatch Tool. US bonds sank, with the 10-year Treasury yield (^TNX) rising to 4.17%.
Investors are now looking to quarterly results this week for inspiration, after triumphant reports from Meta (NASDAQ: META) and Amazon (NASDAQ: AMZN) last week helped send stocks into rally mode and with little on the economic docket.
McDonald’s (MCD) shares fell more than 3% on Monday after its sales fell short of Wall Street estimates.