S&P 500 and Nasdaq pair losses as investors digest Fed comments

  • Fed’s Brainard signals slower rate hikes ahead
  • Technology and growth stocks hit session lows
  • Biogen and Lilly rise up over failure of Roche’s Alzheimer’s drug
  • Indices: Dow up 0.31%, S&P stable, Nasdaq down 0.36%

Nov 14 (Reuters) – The S&P 500 and the technology-heavy Nasdaq pared losses on Monday as comments by U.S. Federal Reserve Vice Chairman Lael Brainard raised hopes that the Federal Reserve could ease its aggressive stance on interest rate hikes.

Brainard, a voting member of the rate-setting committee this year, said it would be “appropriate soon” for the U.S. central bank to ease the pace of its aggressive monetary policy tightening.

“It’s consistent with what the market has already told us,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab in Texas, referring to traders’ prices during a 50-point rate hike. basis by the Fed in December. .

“When someone who is on the committee that makes this decision reiterates what the market is telling us, it gives people some confidence to potentially come in and buy (stocks).”

The S&P 500 and Nasdaq had fallen 0.7% and 1.4%, respectively, earlier in the session as hawkish comments from Fed Governor Christopher Waller over the weekend rattled sentiment. Waller said Sunday that smaller hikes should not be seen as a “softening” of the Fed’s commitment to lower inflation.

The comments by the two Fed officials come amid a weaker-than-expected inflation report last week, which had raised hopes that the Fed could scale back its steep interest rate hikes and helped spur a euphoric market rally.

On Friday, the S&P 500 posted its biggest weekly percentage gain in about five months, while the tech-heavy Nasdaq (.IXIC) posted its best week since March.

In the coming week, several other Fed officials are also scheduled to speak, while the market will also focus on a flurry of economic data for further clues on the interest rate outlook.

As of 12:13 a.m. ET, the S&P 500 (.SPX) was flat at 3,992.84 and the Nasdaq Composite (.IXIC) was down 40.55 points, or 0.36%, at 11,282.78.

The Dow Jones Industrial Average (.DJI) rose 103.10 points, or 0.31%, to 33,850.96, boosted by gains from drugmakers including Johnson & Johnson (JNJ.N) and Amgen ( AMGN.O).

Tech and growth names also pared losses but remained under pressure, with Microsoft Corp (MSFT.O), Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O) down 0 .4% to 2%.

The New York Times reported Monday that Amazon.com (AMZN.O) plans to lay off about 10,000 people in corporate and tech jobs starting this week.

Tesla Inc (TSLA.O) fell 1.0% as chief executive Elon Musk said “I have too much work on my plate” when asked about its recent Twitter acquisition and leadership of the electric vehicle manufacturer.

Chinese leader Xi Jinping and US President Joe Biden met on Monday for long-awaited talks that come as relations between their countries are at a decades-old low, marred by disagreements over a host of issues from Taiwan to trade.

Among other stocks, Biogen Inc (BIIB.O) and Eli Lilly (LLY.N) gained 4.6% and 1.9% respectively after the failure of its Swiss competitor’s Alzheimer’s drug candidate. Roche (ROG.S).

Falling issues outnumbered advances by a 1.54-to-1 ratio on the NYSE and a 1.25-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and one new low, while the Nasdaq recorded 43 new highs and 47 new lows.

Reporting by Shubham Batra, Bansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shounak Dasgupta and Vinay Dwivedi

Our standards: The Thomson Reuters Trust Principles.

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