© Reuters. FILE PHOTO: Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 27, 2023. REUTERS/Andrew Kelly
By Lewis Krauskopf, Shreyashi Sanyal and Johann M Cherian
NEW YORK (Reuters) – Major U.S. stock indexes tumbled on Monday, pressured by declines in technology and other mega-cap stocks, as investors looked forward to an important week of events, including central bank meetings and a slew of earnings reports.
The heavyweight tech sector was among the sectors that declined the most on the day. Shares of Apple Inc (NASDAQ:), Amazon.com Inc (NASDAQ:) and Google parent Alphabet (NASDAQ:) Inc, due to report results later this week, plunged.
More than 100 S&P 500 companies are expected to report earnings this week, which also includes central bank meetings in the US and Europe and closely watched US employment data.
“The market has been on quite a run and trading is a bit more cautious heading into a week that will likely be a turning point for the broader market,” said Keith Lerner, co-chief investment officer at Truist Advisory Services.
According to preliminary data, the S&P 500 lost 52.38 points, or 1.29%, to close at 4,018.18 points, while the Nasdaq Composite lost 227.89 points, or 1.96%, to 11,393, 81. The Dow Jones Industrial Average fell 254.47 points, or 0.75%, to 33,723.61.
Despite Monday’s declines, the S&P 500 was on track to post its biggest January gain since 2019.
The US central bank is expected to raise the Fed funds rate by 25 basis points at the end of its two-day policy meeting on Wednesday, following a 2022 in which the Fed aggressively raised rates to Control skyrocketing inflation.
Fed Chairman Jerome Powell’s press conference will be scrutinized to determine whether the rate-raising cycle may be coming to an end and for signs of how rates could stay elevated.
“It’s probably one of the most important meetings since it all started,” said Sameer Samana, senior global market strategist at fargo wells (NYSE:) Investment Institute. “Unless the Fed extends that timeline significantly from what the market expects, which is that the Fed will be done in the next meeting or two, this may end up marking the pause, if you will.”
Meanwhile, the European Central Bank is expected to make another big rate hike on Thursday.
Investors are also focused on earnings reports amid concerns that the economy may be facing a recession. With more than 140 companies reporting so far, S&P 500 earnings are expected to have fallen 3% in the fourth quarter compared to the prior-year period, according to Refinitiv IBES.
In company news, shares of Johnson & Johnson (NYSE:) fell after a federal appeals court rejected the health giant’s strategy of using bankruptcy to resolve multi-million dollar litigation over claims that its health products talc cause cancer.
