Powell Comments Contribute To Pullback On Wall Street

(RTTNews) - Stocks fluctuated over the course of the trading day on Monday but largely maintained a negative bias throughout the session. The major averages gave back ground following the strong upward move seen on Wall Street last week.

The major averages ended the session in negative territory but off their worst levels of the day. The Dow slid 201.94 points or 0.6 percent to 34,552.99, the Nasdaq fell 55.38 points or 0.4 percent to 13,838.46 and the S&P 500 edged down 1.94 points or less than a tenth of a percent to 4,61.18.

The lower close on Wall Street came following comments from Federal Reserve Chair Jerome Powell, who suggested the central bank might raise interest rates more aggressively if inflation remains too high.

"We will take the necessary steps to ensure a return to price stability," Powell said in remarks to the National Association for Business Economics. "In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so."

He added, "And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well."

The comments from Powell come after the Fed raised interest rates by 25 basis points last week and signaled more rate hikes are likely in the coming months.

The pullback on Wall Street also reflected profit taking, as lingering concerns about the Russia-Ukraine conflict and higher oil prices inspired some traders to cash in on last week's gains.

Last week, the major averages had their best week since November 2020. The Nasdaq soared by 8.2 percent, while the S&P 500 and the Dow spiked by 6.2 percent and 5.5 percent, respectively.

The rally seen last week helped lift the major averages well off their recent lows, although they also remain well off their record highs.

Traders also kept an eye on the latest developments in Ukraine, with peace talks with Russia failing to make substantial progress on key issues.

Sector News

Tobacco stocks turned in some of the market's worst performances on the day, dragging the NYSE Arca Tobacco Index down by 2.7 percent.

Concerns about the outlook for interest rates also weighed on housing stocks, as reflected by the 2.5 percent slump by the Philadelphia Housing Sector Index.

Airline stocks also gave back ground following recent strength, resulting in a 1.4 percent dive by the NYSE Arca Airline Index.

Brokerage and retail stocks also saw notable weakness on the day, while energy stocks moved sharply higher along with the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with the Japanese markets closed on the day. While China's Shanghai Composite Index inched up by 0.1 percent, Hong Kong's Hang Seng Index slid by 0.9 percent.

The major European markets also turned mixed on the day. While the U.K.'s FTSE 100 Index rose by 0.5 percent, the German DAX Index and the French CAC 40 Index both fell by 0.6 percent.

In the bond market, treasuries pulled back sharply following the rebound seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, spiked 16.7 basis points to 2.315 percent, its highest closing level since May 2019.

Looking Ahead

Following a quiet day on the U.S. economic front, the economic calendar remains relatively light on Tuesday.