- US stocks fell on Monday as investors became more cautious ahead of the Federal Reserve's rate decision and a slew of big-tech earnings.
- The Nasdaq 100 had its worst day since December 22, while the S& 500 dropped the most since January 18. Apple and Microsoft declined, weighing on both indexes as investors await earnings from companies such as Alphabet and Meta Platforms this week.
- Treasuries fell, while yields rose across the curve. After ending last week at around 3.50%, the benchmark 10-year rate has risen to around 3.55%. The dollar index increased. The West Texas Intermediate fell below $78 a barrel as traders awaited clues about the Fed's next move.
- On Wednesday, the Fed is widely expected to raise rates by a quarter percentage point, slowing its pace for the second straight session. However, traders will be watching how officials set the tone for future meetings. Fed Chair Jerome Powell has continued to push back against traders expecting rate cuts later this year, emphasising that he will not budge until inflation has moderated significantly. Stocks continued to rise in January, with investors seemingly dismissing Powell's "higher-for-longer" warning.
- Traders are also anticipating the release of the US jobs report later this week. A less constrained labour market is a key Fed goal. Investors have also been digesting a slew of earnings reports, with more on the way this week. Earnings pressure has raised concerns about the economy's health and the outlook for equities.
