31st January 2023 – (New York) U.S. stocks pulled back on Monday as investors awaited a key policy decision from the Federal Reserve.
The Dow Jones Industrial Average fell 260.99 points, or 0.77 percent, to 33,717.09. The S&P 500 sank 52.79 points, or 1.30 percent, to 4,017.77. The Nasdaq Composite Index shed 227.90 points, or 1.96 percent, to 11,393.81.
Ten of the 11 primary S&P 500 sectors ended in red, with energy and technology down 2.29 percent and 1.94 percent, respectively, leading the laggards. Consumer staples eked out a gain of 0.07 percent.
The Fed is widely expected to raise rates by 25 basis points when concluding a two-day policy meeting on Wednesday.
While the market sees this as all but certain, the real question is how high the Fed will continue to push rates this year, Kevin Matras, executive vice president at Zacks Investment Research, said in a note on Monday.
The U.S. central bank increased interest rates for seven times last year, boosting the target range for the federal funds rate to 4.25 percent to 4.5 percent, in a bid to quell inflation.
Its December dot plot hinted that policy makers saw benchmark rates rising to a median level of 5.1 percent in 2023. Since then, some Fed officials have suggested the Fed might need to go even higher.
For the week ending Friday, the Dow rose 1.8 percent, the S&P 500 gained 2.5 percent, and the tech-heavy Nasdaq jumped 4.3 percent.