S&P 500, Nasdaq pare losses as investors digest Fed comments

  • Fed’s Brainard signals slower rate hikes ahead
  • Tech and growth stocks off session lows
  • Biogen, Lilly rise on Roche’s Alzheimer’s drug failure
  • Indexes: Dow up 0.31%, S&P flat, Nasdaq down 0.36%

Nov 14 (Reuters) – The S&P 500 and the tech-heavy Nasdaq pared losses on Monday as comments from US Federal Reserve Vice Chair Lael Brainard lifted 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 that it would be “appropriate soon” for the US central bank to reduce the pace of its aggressive monetary policy tightening.

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

“When someone who is a part of the committee who makes that decision reiterates what the market is telling us, that gives people some confidence to potentially go in and buy (stocks).”

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

Comments from both the Fed officials come against the backdrop of a softer-than-expected inflation report last week, which had raised hopes that the Fed could scale back its hefty interest rate hikes and helped drive a euphoric market rally.

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

In the week ahead, several other Fed officials are also due to speak while market focus will also be on a slew of economic data for further clues on the outlook for interest rates.

At 12:13 am 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) was up 103.10 points, or 0.31%, at 33,850.96, boosted by gains in drugmakers including Johnson & Johnson (JNJ.N) and Amgen (AMGN.O).

Technology and growth names too cut some losses but remained under pressure, with Microsoft Corp (MSFT.O), Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O) down between 0.4% and 2%.

The New York Times on Monday reported that Amazon.com (AMZN.O) was planning to lay off about 10,000 people in corporate and technology jobs starting as soon as 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 his recent acquisition of Twitter and his leadership of the electric-vehicle maker.

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 the lowest in decades, 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 Swiss rival Roche’s (ROG.S) Alzheimer’s disease drug candidate.

Declining issues outnumbered advancers for 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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