Wall St. slips more than 2% as tech route deepens; Fed meeting eyes

The benchmark index moved closer to confirming a correction on Monday before bouncing back late in the session. A correction is confirmed when an index closes 10% or more below its record closing level.

US equities have had a turbulent start to 2022, with the S&P 500 now down 10.4% from its record high on January 3, while the tech-heavy Nasdaq is on track to start the year for the worst since 1980.

The Fed will convene its two-day monetary policy meeting later in the day, which will be watched closely for signals on the central bank’s timeline for a hike in key interest rates to tackle inflation.

Fed funds futures traders are up 25 basis points in March, in addition to three more rate hikes through the end of the year.

All 11 major S&P 500 sectors declined in early trade, with eight each losing more than 2%.

“It seems the market is reacting to the new reality of the Fed’s toughening policy … Capital Group,” said Dan I, chief investment officer at Fort Pitt.

Geopolitical tensions in Ukraine have added to the uncertainty, with the US Defense Department saying about 8,500 US troops were put on alert.

At 10:06 am, the Dow Jones Industrial Average was down 764.89 points, or 2.23%, at 33,599.61, the S&P 500 was down 115.61 points, or 2.62%, at 4,294.52 and the Nasdaq Composite was down 395.35 points, or 2.85. %, at 13,459.78.

Fourth-quarter earnings season has started on a mixed note, with all eyes now on earnings from mega-cap growth company Microsoft after the market closes on Tuesday, followed by Apple and Tesla later this week.

According to Refinitiv’s IBES estimates, earnings for S&P 500 companies were expected to grow 24.1% year-over-year.

“Q4 earnings are certainly good, but they are in line with expectations compared to the big beats we’ve seen in the last four quarters,” I said.

General Electric Co. fell 8.4% after the industrial conglomerate reported quarterly revenue declines.

IBM rose 0.6% after the IT giant beat quarterly Wall Street revenue and profit estimates, while 3M slipped 2.5% despite beating market estimates for fourth-quarter results.

American Express jumped 3.4% on an upbeat fourth-quarter profit, while another Dow component, Johnson & Johnson, was flat after missing estimates for fourth-quarter revenue.

The number of issues declined to a 6.86-to-1 ratio on the NYSE and to a 4.07-to-1 ratio on the Nasdaq.

The S&P index posted no new 52-week highs and two new lows, while the Nasdaq posted six new highs and 45 new lows.

This story has been published without modification in text from a wire agency feed.