STORY: U.S. stocks closed lower Monday with large technology names like Alphabet, Meta Platforms, and Tesla falling sharply. Alphabet and Tesla suffered analyst downgrades. This comes ahead of several economic reports and comments from Federal Reserve Chair Jerome Powell.
The Dow slid a hair while the S&P 500 dropped about half of one percent and the tech-heavy Nasdaq gave back more than one percent.
Data on inflation, orders for durable goods and consumer sentiment are due out this week while Powell speaks with European banking colleagues. Last week he signaled more rate hikes are likely. Currently, the market expects another quarter point move at the Fed’s July meeting to push rates to about five-and-one-half percent. CAPTRUST Chief Investment Officer Mike Vogelzang said the central may have to go higher than that to make a more meaningful dent in inflation.
“I don’t think the markets pricing in 6%, I don’t think the market, the stock market is pricing in six and a half. To 7% we. Just don’t know yet what might happen for the Fed to get those rates down. (FLASH) Why hasn’t the economy slowed down if we’ve gone from, you know, 525 basis points of interest rate increases, economies softened at the margin. But the underlying strength is profound. It’s incredibly powerful. It’s great news for that, but not great news for inflation. And that’s the challenge. And that’s the that’s the difficulty the Federal Reserve has.”
Stocks on the move included Pfizer which declined nearly 4 percent after the drugmaker said it is discontinuing the development of an experimental obesity and diabetes drug due to elevated liver enzymes in patients in clinical studies.
And Carnival which dropped nearly 8 percent. The cruise operator forecast third-quarter earnings below Wall Street expectations.
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