US stocks fell at midsession on Monday as investors took fright of an event- and data-heavy week ahead and markets began to price in a possible US rate hike this year despite the Brexit vote.
The market bellwether S&P 500 index was down 0.5% at 2,165 – still only around 11 points off a record high seen last week but nevertheless in descent.
The Federal Reserve meets on Tuesday and Wednesday. Although widely expected to leave rates on hold at 0.5% the market has increased its expectations that, despite Britain’s vote to quit the European Union economic conditions are improving in the United States and that long overdue rate hike of 25 basis points is on the way.
On Friday, US Gross Domestic Product, the mother of data, is published. This is expected to further fuel the view that rates are due to rise. The data is likely to be available to the Fed by Wednesday when it concludes the latest rate-setting meeting.
The S&P Midcap 400 was down 0.4% at 1,546, led by Kirby Group (NYSE:KEX), down 7.2% at $58.70.
The S&P Smallcap 600 was down 0.3% at 739 and led by Opus Bank (NASDAQ:OPB), down 12% at $32.16 after announcing an underwhelming second quarter earnings report.
Oil prices were not helping bourses. The West Texas Intermediate, the US oil benchmark, was down 2.4% at $43.11 as prices edged close to the $40 mark for the first time since mid-April.
Earnings were also in focus. Some 200 S&P 500 stocks are due to report this week.
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Wall Street shares head lower as week begins
Wall Street shares are following generally in Europe's footsteps and heading lower as the new trading week begins.
The Dow Jones lost 85 to go to 18,483, while the S&P 500 is down 0.43% at the time of writing.
The tech heavy Nasdaq exchange lost 0.15% or 7.55 points to stand at 5,093.
FTSE100 at the time of writing is down 0.48% to stand at 6,697.
Gold is at US$1,322 per ounce, while oil is 2.15% lower at US$43.24 a barrel
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US shares are poised for a flat open after new records tumbles last week.
The Wall Street benchmark S&P 500 hit a fresh record as last week ended, finishing at 2, 175, up 0.46% , or almost 10. Today , futures have it trading at 0.25 lower.
Futures for the Dow Jones Industrial Average are down 1 after it closed up 53 at 18,570 last week, and the Nadsdaq futures are down three - after it closed Friday over 26 higher at 5,100.
US markets will be dominated today by news on internet search giant Yahoo (NASDAQ:YHOO) , whose shares are up 0.28% in pre-market to US$39.49.
Reportedly, the US coms giant Verizon Communications is to buy its search and advertising operations in a whopping US$5bn (£3.8bn).
It comes as the pair were reported on Friday to be in exclusive talks over a possible deal.
Verizon declined to comment on the reports.
Last week, the tech sector was the best performing of the 10 major sectors on the benchmark S&P 500 — rising 1.9 per cent for the week.
Historical data from US earnings helped to boost stocks, albeit US executives are sensitive to what so-called “Brexit” will mean for their businesses in the future.
Today, the Democratic National Convention starts, cue Hillary Clinton and big speeches, and in earnings, Sprint (NYSE:S) and Kimberly-Clark (NYSE: KMB) are among two key companies reporting ahead of the bell.