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S&p 500 struggles for direction on rate hike signals

rate hike

The S&P 500 fell 0.2%, the Dow Jones Industrial Average fell 0.02% and the Nasdaq was 0.5% lower

The S&P 500 swung between gains and losses Monday as investors digested remarks from the Federal Reserve officials insisting further rate hikes were ahead, albeit at a slower pace despite recent data showing slowing inflation.

The S&P 500 fell 0.2%, the Dow Jones Industrial Average fell 0.02%, or 7 points, the Nasdaq was 0.5% lower.

Fed Vice Chair Lael Brainard said Monday that it probably would be ‘appropriate soon to move to a slower pace of increases,’ though added that there still was ‘additional work to do on raising rates.

The remarks came after Fed Governor Christopher Waller pushed back against investor bets on a pause on rate hikes, insisting that monetary policy tightening ‘isn’t ending in the next meeting or two.’

Defensive sectors of the market including health care were up sharply, with Moderna and Biogen leading to the upside.

Moderna jumped more than 5% after reporting that its new COVID-19 boosters provided increased protection against Omicron subvariants than its original formula.

Biogen advanced more than 4% on news that Roche’s Alzheimer’s drug candidate failed to show evidence of slowing dementia progression in two drug trials.

Tech, meanwhile, was mostly lower, pressured by a more than 1% decline in Microsoft. Meta Platforms Inc bucked the trend, however, rising more than 1%.

A more than 2% rally in Advanced Micro Devices boosted chip stocks after receiving an upgrade from Baird and UBS.

UBS upgraded AMD to outperform from neutral and lifted its price target on the stock to $95 from $75, on expectations that demand for chips is set to resume as the glut in chip inventories is nearing a peak. slipped more than 1% as the e-commerce giant reportedly plans to lay off about 10,000 employees as soon as this week.

Energy stocks shrugged off a slump in oil prices after OPEC cut its estimate on global oil demand amid a weaker global economic backdrop.

Valero Energy Corporation, Pioneer Natural Resources Co and Chevron Corp led the gains in the sector.

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