Investing.com – Wall Street closed lower on Monday amid fears that the Federal Reserve could adopt a more aggressive approach to monetary policy tightening amid a solid economic growth and improving US inflation.
The Dow Jones Industrial Average closed lower at 26,439.48. The S&P 500 closed 0.67% lower, while the Nasdaq Composite closed at 7466.50, down 0.52%.
Risk markets fell as treasury yields jumped amid growing investor expectations that the Federal Reserve may adopt a more hawkish tone in its policy statement, when it concludes its two-day meeting Wednesday.
Goldman Sachs said it expects the Federal Reserve to adopt a slightly hawkish slant in its commentary related to economic conditions and inflation.
Mostly bullish economic data, however, did little to lift risk sentiment as it added to narrative of an improving economy able to cope with a faster pace of rate hikes.
The Commerce Department said on Monday consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4% in December after an upwardly revised 0.8% rise in the previous month.
Personal income rose 0.4% in December after rising 0.3% in the previous month, while the savings rates hit a 10-year low, prompting some analysts to warn that a rebound in savings would weigh on consumer spending in the first quarter of 2018.
The rise personal income comes in the wake of recently enacted tax laws – which has triggered a host of companies to issue employee wage hikes and bonuses – boosting personal income, spurring a rise in spending.
On the corporate news front, VMware Inc (NYSE:VMW) fell 16.46% as rumours swirled that VMware could be nearing a deal to buy dell.
'Bulls and Bears' on Wall Street
The top Dow gainers for the session: Goldman Sachs Group Inc (NYSE:GS) rose 1.6%, Wal-Mart Stores Inc (NYSE:WMT) up 1.1% and General Electric Company (NYSE:GE) up 0.9%
Caterpillar Inc (NYSE:CAT) down 2.7%, Apple Inc (NASDAQ:AAPL) down 2.1%, and Chevron Corporation (NYSE:CVX) down 2.1%, were among the worst Dow performers of the session.