- Stocks in the US sank late Monday as prominent tech stocks continued to fall. Investors weighed the outlook for monetary policy ahead of major inflation data later this week, and benchmark Treasury rates were little changed.
- In the final hour of trading, the S&P 500 fell from session highs. The tech-heavy Nasdaq 100 finished near the day's lows, headed down by drops in Meta, Microsoft, and Alphabet. Peloton jumped after news that it is looking into takeover options. The Treasury curve steepened, though movements were muted, and the dollar was little changed.
- Following a strong jobs report in the US, investors are wrestling with the likelihood of the sharpest monetary tightening cycle since the 1990s, with markets pricing in more than five quarter-point Federal Reserve interest-rate hikes in 2022. This week's US inflation report could cause more market turbulence. A reading of more than 7% is projected, the highest since the early 1980s.
- The ECB took a hawkish turn this week, with ECB's Lagarde no longer ruling out a rate hike this year. In a speech to the European Parliament on Monday, Lagarde stated that any changes to monetary policy will be "gradual."
- Last week, US stocks finished higher, but trading was choppy due to weak earnings from US tech titans such as Facebook-owned networking platforms and favourable earnings from Amazon. Solid jobs data on Friday bolstered the case for a hawkish Fed approach, which is good for the economy.
