By Peter Nurse and Liz Moyer
Investing.com -- U.S. stocks closed lower on Monday after Federal Reserve Chair Jerome Powell said the central bank could lift interest rates more quickly and in larger steps to tame inflation.
Stocks ended last week with outsized gains despite investors keeping a wary eye on the developments in Ukraine and a series of Fed speakers a few days after the central bank started its tightening cycle.
At 4:57 PM ET, the Dow Jones Industrial Average was down 1%, while the S&P 500 fell 0.6%, and NASDAQ Composite fell 1.1%.
Wall Street's three main indexes notched up last week their largest weekly percentage gains since early November 2020 with the Dow climbing 5.5%, the S&P adding 6.2% and the Nasdaq rising 8.2%.
This followed the Federal Reserve delivering on Wednesday its first rate hike since 2018 along with an encouraging assessment of the U.S. economy. This is widely expected to be the first of a series of hikes, with the central bank pointing to increases at its remaining six meetings this year.
Powell, speaking at the National Association of Business Economists conference, said the Fed could life rates in half-point stages, rather than the customary quarter-point move, setting traders abuzz with the notion that a more aggressive approach to inflation was in the works.
Investors will be looking for the thoughts of Fed officials -- more are also speaking today and this week -- given the concerns over stubbornly high inflation, sky-high commodity prices and few signs of an end to the conflict in eastern Europe.
A Kremlin spokesman said Monday that peace talks have not progressed enough for a meeting between the Russian and Ukrainian presidents to take place. This comes after Ukraine rejected a Russian demand that its forces lay down their arms and leave the besieged southern port of Mariupol.
The economic data slate is largely empty Monday, but the week as a whole will feature reports on durable goods orders, initial jobless claims, both new and pending home sales, as well as services and manufacturing PMI data.
In corporate news, Warren Buffett's Berkshire Hathaway (NYSE:BRKa) announced earlier Monday it plans to purchase Alleghany Corporation (NYSE:Y) in an all-cash deal valued at $11.6 billion.
A Boeing (NYSE:BA) 737 airliner, but not one its MAX planes, operated by China Eastern Airlines (NYSE:CEA) crashed earlier, killing 132 people. Boeing shares fell 4% and helped weigh on the Dow.
Nike (NYSE:NKE) is scheduled to release quarterly results after the close Monday, and the sportswear giant’s sales could suffer from the powerful cocktail of rising Covid-19 cases in China, the Russia-Ukraine crisis and lingering supply issues.
Oil prices jumped Monday as the EU meets to consider whether to join the United States in imposing an oil embargo on Russia as the sanctions already levied on Moscow for its invasion have yet to persuade Russian President Vladimir Putin to stop the fighting.
This would be an economically tough choice, as the EU relies on Russia for 40% of its gas, with Germany the most dependent of the bloc's large economies.
By 4:57 PM ET, U.S. crude futures traded 7% higher at $112.06 a barrel, while the Brent contract rose 8% to $116.66.
Additionally, gold futures rose 0.3% to $1,935/oz.
The story was originally published at 7 AM ET and updated.