The tech-focused Nasdaq fell more than 1% on Monday as megacap growth stocks including Apple, Amazon and Alphabet declined ahead of their earnings reports this week, while investors also awaited key central bank meetings.
The U.S. Federal Reserve is seen hiking the Fed funds rate by 25 basis points (bps) at the end of its two-day policy meeting on Wednesday, close on the heels of economic reports showing signs of slowing demand and cooling inflation.
This will likely be the smallest rate increase since the Fed kicked off its tightening cycle 10 months ago with a 25 bps hike, with financial markets pricing in a final rate hike in March.
“The Fed’s going to continue to err on the side of caution with respect to inflation because of the fact that it still remains well above the 2% target … we’re seeing signs that inflation may be coming down, but it’s still not low enough,” said Adam Sarhan, chief executive of 50 Park Investments in New York.
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