© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 7, 2022. REUTERS/Brendan McDermidBy Caroline Valetkevitch
NEW YORK (Reuters) – U.S. stocks declined on Monday as investors worried about the impact of more interest rate hikes and pulled out of technology shares and chipmakers after the United States announced restrictions aimed at hobbling China’s semiconductor industry.
Federal Reserve Vice Chair Lael Brainard said tighter U.S. monetary policy has begun to be felt in an economy that may be slowing faster than expected, but the full brunt of Fed interest rate increases still won’t be apparent for months.
Despite growing concerns by a number of economists and analysts that the Fed’s interest rate hikes could increase unemployment, Chicago Fed President Charles Evans continued to back the central bank’s attempt to lower inflation, saying that while it sounds “optimistic” he believed it could do so “while also avoiding recession.”
“People are worried about the economy. People are worried about a possible recession,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
The was lower and touched a two-year low, after the Biden administration published a set of export controls on Friday, including a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. equipment.
Shares of Nvidia (NASDAQ:) Corp, Qualcomm (NASDAQ:) Inc, Micron Technology Inc (NASDAQ:) and Advanced Micro Devices (NASDAQ:) were lower.
Investors were also cautious ahead of the U.S. third-quarter earnings season, which is set to kick off on Friday with results from some of the major banks.
According to preliminary data, the S&P 500 lost 26.80 points, or 0.74%, to end at 3,612.86 points, while the Nasdaq Composite lost 112.62 points, or 1.06%, to 10,539.78. The Dow Jones Industrial Average fell 90.46 points, or 0.31%, to 29,208.82.
Estimates for third-quarter earnings have come down in recent weeks. Analyst expect earnings for companies to have risen 4.1% compared with an increase of 11.1% expected at the beginning of July, according to IBES data from Refinitiv.
Microsoft (NASDAQ:) was among the biggest drags on the three major indexes.
Investors were also awaiting U.S. inflation data this week.
The U.S. bond market was shut for the Columbus Day holiday on Monday.
