Wall Street edges lower on US central bank worries

US stock indexes have edged lower with Tyson Foods falling on disappointing quarterly results while investors reassess their predictions on when the US Federal Reserve will start cutting rates.

The non-farm payrolls report on Friday that showed the US economy added jobs at a rapid pace spooked investors.

“Markets are looking ahead to a slower start… today is a bit of a rethink on when the Fed might have to cut rates,” Art Hogan, chief market strategist at B Riley Financial said.

“The consensus had been firmly in the camp of the fourth quarter of this year but with the red hot jobs number there is a bit of a second guessing.”

Traders will scrutinise speeches by Fed officials this week, including chair Jerome Powell, for any change in the central bank’s dovish rhetoric after data last week showed services activity were strong in January.

Yield on the 10-year US Treasury note extended gains to more than a month’s high.

Money market participants expect the Fed’s terminal rate to settle above 5.0 per cent by May followed by rate cuts in September.

After being bruised in 2022, US equities have recovered strongly in 2023, led by megacap growth stocks amid hopes that the Fed will temper its aggressive rate hikes, which in turn could alleviate some pressure on equity valuations.

Tyson Foods Inc slipped 5.8 per cent on missing analysts’ estimates for quarterly revenue and profit.

More than 69 per cent of the S&P 500 firms have reported results above expectations, according to Refinitiv.

Overall, analysts still expect quarterly earnings of S&P 500 firms declining 2.8 per cent.

Meanwhile, Tesla Inc bucked the overall trend with a 1.3 per cent gain after a US jury on Friday found Chief Executive Elon Musk and his company were not liable for misleading investors when Musk tweeted in 2018 that he had “funding secured” to take the electric-vehicle maker private.

In early trading, the Dow Jones Industrial Average was down 179.60 points, or 0.53 per cent, at 33,746.41, the S&P 500 was down 33.71 points, or 0.81 per cent, at 4,102.77, and the Nasdaq Composite was down 125.32 points, or 1.04 per cent, at 11,881.64.

All of the 11 major S&P 500 indexes were in the red with the real estate sector slumping 1.5 per cent.

Miner Newmont Corp slid 4.5 per cent on its $US16.9 billion ($A24.6 billion) offer for Australian peer Newcrest Mining Ltd to build a global gold behemoth.

The materials sector dropped 1.4 per cent.

US-listed Chinese stocks such as Pinduoduo Inc and Baidu Inc slid 4.9 per cent and 3.0 per cent respectively on geopolitical concerns after a US military fighter jet shot down a suspected Chinese spy balloon off the coast of South Carolina on Saturday.

Traders will await earnings reports from Walt Disney Co, PepsiCo Inc and Abbvie Inc this week.

Declining issues outnumbered advancers for a 4.53-to-1 ratio on the NYSE and a 2.03-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and one new low while the Nasdaq recorded 43 new highs and 12 new lows.

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