- US stocks ended lower on Monday as investors assessed the Fed's likely policy path.
- Fed chair Jerome Powell said on Friday that the central bank's top priority is taming inflation.
- Investors are less optimistic toward a Fed pivot even as inflation is showing signs of cooling.
US stocks closed lower on Monday while bond yields jumped as investors struggled with the Federal Reserve's drive to tame inflation with rate hikes.
Fed chair Jerome Powell did little to give Wall Street optimism in remarks from Wyoming on Friday, and said that dampening price pressures remained the top concern for the central bank.
Investors turned sour after Powell's speech, sending major indexes tumbling Friday which extended to the market open Monday. Stocks pared some of the day's worst losses but struggled to get out of the red.
Investors hoping for a Fed pivot may be disappointed next month, as optimism that the Fed could pause its campaign of rate hikes has mostly waned. Wall Street is pricing in strong odds of at least a 50 basis point hike, while also eyeing the likelihood of another 75 basis point jump.
Here's where US indexes stood after the 4:30 p.m. closing bell on Monday:
- S&P 500: 4,030.76, down 0.66%
- Dow Jones Industrial Average: 32,099.05, down 0.57%
- Nasdaq Composite: 12,017.67, down 1.02%
Renowned Economist Mohamed El-Erian cheered Fed chair Powell's latest remarks, saying that "the market is starting to realize that when your Fed chair mentioned inflation 45 times in eight minutes, something is changing. That's the good news."
Goldman Sachs recommends turning to commodities as the likelihood of a recession falls. The bank said in a note Monday that commodities have already priced in a steep downturn which could be a buy signal for sectors like energy and agriculture.
Elsewhere, Germany assuaged fears concerning energy reserves in Europe on Monday with the country's economy Minister Robert Habeck telling Bloomberg that natural gas storage would be 85% full by next month, ahead of its October target date.
Oil added to early gains Monday, with West Texas Intermediate crude climbing 4.13% to $96.89 a barrel. International benchmark Brent Crude ticked up 3.83% to $104.87.
Gold was little changed at $1,736.63. The 10-year yield added 7.9 basis points to 3.114%.
Bitcoin fell o.33% to $20,132.91.