Stocks slide as investors await Fed's next steps

STORY: The main U.S. stock indexes ended lower on Monday as investors appeared to shift gears – and may now be thinking that the Federal Reserve could take longer than expected to wrap up its aggressive campaign against inflation.

The Dow closed down fractionally, while the S&P dropped six-tenths of a percent and the Nasdaq plunged a full percent.

After a quarter-point rate hike by the Fed last week, Chair Jerome Powell gave a speech that seemed to signal the Fed could ease up on its interest rate hikes.

But that was followed by a report Friday that showed job growth soared in January… which might make it hard for the Fed to quit in its fight against inflation.

Kevin Mahn is president and chief investment officer at Hennion & Walsh Asset Management.

“I think investors at this point in time are very confused about the future direction of the economy, the future direction of interest rates, and ultimately the future direction of the markets. [FLASH] We have to remember that inflation has now been above 5% for 19 consecutive months, and the Fed wants to bring inflation down to 2%. Can they really bring it down to 2% if in fact they only have one, or maybe two more rate hikes planned for the first half of this year?”

In corporate earnings, Tyson Foods fell sharply after missing analysts' estimates for quarterly revenue and profit.

Contrary to the overall trend, Tesla rose 2.5% after a U.S. jury on Friday found Chief Executive Elon Musk was not liable for misleading investors when he tweeted in 2018 that he had "funding secured" to take the electric-vehicle maker private.

Meme stocks, such as AMC Entertainment and Gamestop, also gained steam late in the session, ending roughly 12% and 7% higher, respectively.