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The
S&P 500 and the Nasdaq registered their largest weekly
percentage drop since March on Friday as benchmark Treasury
yields hit multi-year highs while investors digested the Fed's
hawkish outlook revisions.
Just a few days after the Fed's decision to let its key rate
stand and likely keep restrictive policy in place for longer
than previously anticipated, some policymakers warned of further
hikes as they doubt if the inflation battle is over.
Uncertainty around the trajectory for interest rates, including
a potential hike by year-end and expectations for fewer cuts
next year, have pushed the 10-year Treasury yield to a 16-year
high, hurting growth stocks.
Apple, Microsoft, Tesla and Meta Platforms remained under
pressure on Monday, losing between 0.2% and 0.4% in premarket
trading.
Investors will now monitor data on durable goods and the Fed's
preferred inflation gauge Personal Consumption Expenditures (PCE)
price index for August, second-quarter GDP, and remarks by Fed
policymakers including Chair Jerome Powell through the course of
the week.
Traders' bets on the benchmark rate remaining unchanged in
November and December stood at 74% and 59%, respectively,
according to CME's FedWatch tool.
Investors also assessed other risks including high oil prices, a
resumption of student loan payments in October and a government
shutdown that is set to begin if lawmakers are unable to pass a
budget by Sep. 30.
At 5:23 a.m. ET, Dow e-minis were down 27 points, or 0.08%, S&P
500 e-minis were down 3 points, or 0.07%, and Nasdaq 100 e-minis
were down 14.25 points, or 0.1%.
Media firms Warner Bros Discovery, Paramount Global, Netflix and
Walt Disney gained between 0.8% and 4% after Hollywood's writers
union reached a preliminary labor agreement with major studios
on Sunday, a deal expected to end one of two strikes that have
halted most film and television production.
HP Inc fell 2.4% after Warren Buffett's Berkshire Hathaway sold
nearly 4.8 million shares of the PC-maker.
(Reporting by Ankika Biswas in Bengaluru;Editing by Arun Koyyur)
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