US stocks fall again on shifting Fed outlook

US stocks fall again on shifting Fed outlook

New York Stock Exchange on Jul 8
Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK: Wall Street stocks fell for a second straight session on Monday (Jul 8) as investors reassessed the prospects for lower interest rates ahead of key Federal Reserve congressional testimony.

US markets continued to pull back after Friday's strong June jobs report left investors betting that the Fed would cut interest rates by less than previously thought.

Fed Chair Jerome Powell is scheduled to begin two days of congressional testimony on Wednesday.

Recent commentary from Powell and other Fed officials have opened the door to a possible interest rate cut as soon as this month in light of economic weakness. But the strong jobs data could shift that calculus, analysts said.

The Dow Jones Industrial Average dropped 115.98 points (0.43 per cent) to 26,806.14.

The broad-based S&P 500 shed 14.46 points (0.48 per cent) to 2,975.95, while the tech-rich Nasdaq Composite Index tumbled 63.41 points (0.78 per cent) to 8,098.38.

US stocks have pulled back since all three indices closed at records on Wednesday following a cease-fire on new tariff actions in the US-China trade war amid hopes for easier monetary policy.

Key data this week include consumer pricing, as well as the first batch of quarterly earnings reports from PepsiCo and Delta Air Lines, among others.

Among individual companies, Apple fell 2.1 per cent after Rosenblatt Securities downgraded shares in part due to expected weakness in iPhone sales.

Boeing shed 1.3 per cent after Saudi budget carrier flyadeal withdrew an order for Boeing's grounded 737 MAX jets in favour of a fleet entirely composed of Airbus planes.

US shares of Deutsche Bank slid 6.1 per cent after the German bank announced it would cut 18,000 jobs by 2022, around one-fifth of the workforce.

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