NEW YORK: US stocks fell on Monday after Federal Reserve Chair Jerome Powell said on Sunday that the central bank is not ready to cut interest rates yet, a media report said.
“We want to see more evidence that inflation is moving sustainably down to 2 per cent. Our confidence is rising. We just want some more confidence before we take that very important step of beginning to cut interest rates,” Powell said, CNN reported.
The Dow slid 401 points, or 1 per cent, in early Monday trading, the S&P 500 declined 0.7 per cent, while the Nasdaq Composite lost 0.9 per cent, CNN reported.
Treasury yields rose as investors continued to mull over Powell’s comments.
Powell dashed investors’ hopes for a rate cut in March at the Fed’s post-meeting press conference, with that optimism further waning after a shockingly strong January jobs report. Powell doubled down on the unlikelihood of a cut next month, CNN reported.
“Those comments along with his statement suggest that as long as inflation data comes in as it has been or better, the Fed will be cutting rates by the summer,” wrote Bespoke Investment Group analysts in a note on Monday, CNN reported.
Elsewhere, McDonald’s shares fell 3.9 per cent after the fast-food chain reported mixed earnings and said that turmoil in the Middle East is hurting its business.
Boeing shares lost 1.2 per cent after a new problem was found during the production of 737 Max jets that will force Boeing to rework about 50 planes that have not yet been delivered, CNN reported.