US STOCKS-Wall Street drops with tech stocks; investors assess rate outlook

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Philadelphia SE Semiconductor index plummets

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US bond market closed for Columbus Day holiday

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S&P 500 tech sector leads decline

(Updates to close)

By Caroline Valetkevitch

NEW YORK, Oct 10 (Reuters) – U.S. stocks fell on Monday as investors worried about the impact of further interest rate hikes and pulled back from technology stocks and chipmakers after the U.S. announced restrictions aimed at hampering China’s semiconductor industry.

Federal Reserve Vice Chairman Lael Brainard said the tightening of U.S. monetary policy was beginning to be felt in an economy that could slow faster than expected, but the weight of interest rate hikes by the Fed still won’t be apparent for months.

Despite growing concerns from a number of economists and analysts that the Fed’s interest rate hikes could increase unemployment, Chicago Fed President Charles Evans continued to support the attempt. of the central bank to reduce inflation, saying that while this sounds “optimistic”, he believed it could do it. “while avoiding recession.”

“People are worried about the economy. People are worried about a possible recession,” said Jake Dollarhide, managing director of Longbow Asset Management in Tulsa, Oklahoma.

The Philadelphia SE Semiconductor index was lower and hit a two-year low, after the Biden administration issued a series of export controls on Friday, including a measure to cut China off from certain semiconductor chips. conductors manufactured all over the world with American equipment.

Shares of Nvidia Corp, Qualcomm Inc, Micron Technology Inc and Advanced Micro Devices fell.

Investors were also cautious ahead of the U.S. third-quarter earnings season, which is expected to kick off on Friday with results from some of the major banks.

According to preliminary data, the S&P 500 lost 26.80 points, or 0.74%, to end at 3,612.86 points, while the Nasdaq Composite lost 112.62 points, or 1.06%, to 10 539.78. The Dow Jones Industrial Average fell 90.46 points, or 0.31%, to 29,208.82.

Third-quarter earnings estimates have fallen in recent weeks. Analysts expect earnings for S&P 500 companies to have risen 4.1% from an 11.1% increase expected in early July, according to IBES data from Refinitiv.

Microsoft was among the biggest drags on all three major indexes.

Investors were also awaiting US inflation data this week.

The US bond market was closed for the Columbus Day holiday on Monday. (Additional reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru; Additional reporting by Bansari Mayur Kamdar; Editing by Anil D’Silva and Aurora Ellis)

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