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Federal Reserve Governor Christopher Waller said on Sunday that
markets should now pay attention to the "endpoint" of rate
increases, not the pace of each move, and the endpoint is likely
"a ways off".
The comments from Waller, a voting member of the rate-setting
committee this year, follow softer-than-expected inflation data
for October that led to a euphoric market rally last week, with
the S&P 500 logging its biggest weekly percentage gains in about
five months.
"The message is coming loud and clear from the Fed, investors
should hold their horses when it comes to expectations of looser
monetary policy," said Susannah Streeter, senior investment and
markets analyst at Hargreaves Lansdown.
Traders now expect the Fed to hike interest rates in December by
a half point, and expect terminal rate in the range of
4.75%-5.0% in May 2023.
At 5:30 a.m. ET, Dow e-minis were down 82 points, or 0.24%, S&P
500 e-minis were down 14 points, or 0.35%, and Nasdaq 100
e-minis were down 71.5 points, or 0.60%.
Growth stocks gave back some gains from last week, with Apple
Inc, Intel Corp and Amazon.com down about 1% each in premarket
trading.
Tesla Inc dropped about 2% as Chief Executive Elon Musk said "I
have too much work on my plate" when asked about his recent
acquisition of Twitter and his leadership of the
electric-vehicle maker.
In the week ahead, investors will closely monitor a slew of
economic data, including retail sales numbers on Wednesday.
Chinese leader Xi Jinping and U.S. President Joe Biden met on
Monday for long-awaited talks that come as relations between
their countries are at their lowest in decades, marred by
disagreements over a host of issues from Taiwan to trade.
(Reporting by Shubham Batra, Bansari Mayur Kamdar in Bengaluru;
Editing by Shounak Dasgupta)
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