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Stocks fall, dollar gains ahead of economic, earnings data

earnings data

The DJIA fell 93.91 points, or 0.32%, to 29,202.88, the S&P 500 lost 27.27 points, or 0.75%, at 3,612.39, and the Nasdaq Composite dropped 110.30 points, or 1.04%, to 10,542.10

The MSCI global index of stocks lost ground in a volatile session on Monday while the dollar gained slightly as investors braced for high inflation data and the start of corporate earnings season.

Oil futures sold off and Wall Street’s stock indexes were volatile, while U.S. bond markets were closed for a federal holiday.

U.S. investors, anxious about rising interest rates and signs of economic weakness, were also cautious ahead of inflation data due out Thursday and the start of the third-quarter earnings season on Friday.

JPMorgan Chase & Co Chief Executive Jamie Dimon told CNBC the United States and the global economy could tip into a recession by mid-2023.

Then Fed Vice Chair Lael Brainard said tighter U.S. monetary policy had begun to be felt in an economy that may be slowing faster than expected, but that the full interest rate increases would not be apparent for months.

There’s nothing specific in Brainard’s comments that makes you say the Fed is changing its policy but there’s at least some signs that the Fed is not proceeding blindly on a rate hiking restrictive path, said Steve Sosnick, chief strategist at Interactive Brokers in Greenwich, Connecticut.

Dimon’s comments definitely didn’t help. A lacklustre downward market didn’t need those comments. They’ve been balanced out somewhat by Brainard, he said.

The Dow Jones Industrial Average fell 93.91 points, or 0.32%, to 29,202.88; the S&P 500 lost 27.27 points, or 0.75%, at 3,612.39; and the Nasdaq Composite dropped 110.30 points, or 1.04%, to 10,542.10.

Nasdaq led the declines and registered its lowest closing level since July 2020 as chip stocks sold off sharply on the Biden administration’s sweeping set of export controls published on Friday, including a measure to cut off China from certain semiconductors made with U.S. equipment.

Wall Street had already declined on Friday after an upbeat September jobs report cemented expectations for another large rate hike.

Four of the biggest U.S. banks are due to report earnings on Friday, with large lenders expected to post lower profits as the economy slowed and volatile markets stifled dealmaking.

The MSCI All-World index ended down 1.0% in its fourth straight day of losses. The pan-European STOXX 600 had closed down 0.4% after skimming one-week lows. Emerging market stocks lost 1.4%.

Chicago Fed President Charles Evans also said on Monday that U.S. Fed officials were closely aligned on the need to raise the target policy rate to around 4.5% by early next year, unless data upends current projections.

Minutes of the Fed’s last policy meeting will be published this week and could offer clues on rate-setters’ thinking about future monetary policy.

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