US: Stocks slide, closing lower after last week’s rally

WALL Street stocks ended lower on Monday, stumbling after last week’s rally fueled by hopes the Federal Reserve would ease its interest rate hikes, and as fresh policymaker comments failed to reassure markets. The Dow Jones Industrial Average dipped 0.6 per cent to close at 33,536.70.

The broad-based S&P 500 dropped 0.9 per cent to 3,957.25, and the tech-rich Nasdaq Composite Index fell 1.1 per cent to 11,196.22.

Equities jumped late last week after official data showed US inflation logged its lowest annual jump since January, boosting hopes the Fed might ease off its aggressive interest rate increases, and perhaps not raise rates as much as anticipated.

Fed Vice Chair Lael Brainard said on Monday it would likely be “appropriate soon” for the central bank to slow the pace of rate hikes.

However, with inflation still hovering at its highest level in recent decades, Brainard said the Fed still has “additional work to do both on raising rates” and tamping down prices. Nick Reece of Merk Investments noted that big swings like those seen in major stock indexes last week can happen in a bear market.

“I don’t think this is a rally that you can really believe in. So I feel like the path of least resistance is still lower,” he told AFP. Investors are awaiting earnings reports from major retailers including Walmart, Target and Home Depot, which will serve as a proxy for consumer demand. Walmart, which is set to report earnings on Tuesday before the market opens, closed nearly 3 per cent lower. AFP