Indexes extend losses following Powell comments
2:49 pm Monday, September 30th, 2024
By Caroline Valetkevitch
NEW YORK (Reuters) -U.S. stocks extended losses on Monday after Federal Reserve Chair Jerome Powell said the U.S. central bank is not in a hurry to lower interest rates and he sees two more cuts, totaling 50 basis points, this year as a baseline if the economy evolves as expected.
Powell, at a National Association for Business Economics conference in Nashville, Tennessee, also said recent revisions to data on economic growth, savings rates and personal income had removed some “downside risks” the Fed had been focused on.
The Fed earlier this month began a new easing cycle with a large 50 basis point rate cut.
“He basically has underscored that the Fed remains data dependent but nonetheless – the way I’m interpreting it – he’s looking toward an economy that remains solid and a labor market that remains solid and inflation coming down,” said Quincy Krosby, chief global strategist, LPL Financial in Charlotte, North Carolina.
The S&P 500 was little changed just before Powell’s remarks.
The Dow Jones Industrial Average fell 305.54 points, or 0.72%, to 42,007.46, the S&P 500 lost 24.83 points, or 0.43%, at 5,713.34 and the Nasdaq Composite dropped 94.61 points, or 0.52%, to 18,024.99.
Key economic reports due this week include monthly payrolls on Friday.
CVS Health rose 2% after a report showed hedge fund Glenview Capital Management will meet top executives at the healthcare company to propose ways to improve operations.
(Additional reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Maju Samuel and Richard Chang)
