US stock indices fell on Tuesday ahead of Federal Reserve Chairman Jerome Powell's speech, which could provide a fresh perspective on policy tightening and the central bank's plans to fight inflation.
Powell is due before the Senate Banking Committee at 10:00am ET for consideration for a second four-year term as head of the Fed, while Lael Brainard is due before the same committee on Thursday for promotion to a four-year term. as deputy Fed chair.
"My view is that Powell will stick to his script as he is usually disciplined enough to do so and I don't expect anything to surprise the markets," said David Bahnsen, chief investment officer at Bahnsen Group.
The S&P 500 index fell for the sixth straight session, while the Nasdaq rebounded from Monday's gains as stocks of major technology companies were depressed.
Ten of the S&P 500's 11 sectors were lower, with technology leading the decline.
"The start of 2022 has been challenging for equities, but investors should remember that the fundamental story is still pretty strong," said Ryan Detrick, chief market strategist at LPL Financial.
Rising megacapitalisation companies including Apple Inc, Amazon.com Inc, Microsoft Corp and Meta Platforms Inc behaved mixed in early trading.
Marco Kolanovic, chief global markets strategist at JPMorgan Chase & Co, called the recent pullback in riskier assets "probably excessive" and said it provided investors with a buying opportunity.
At 9:44pm ET, the Dow Jones Industrial Average was down 253.81 points, or 0.70%, to 35,815.06 points, the S&P 500 was down 27.75 points, or 0.59%, to 4,642.54 points and the Nasdaq Composite was down 95.47 points, or 0.64. %, at 14,847.36.
Stock markets have suffered since the beginning of this year after minutes of the December Fed meeting indicated an earlier-than-expected interest rate hike due to rising inflationary pressures.
Investors will be keeping an eye on key consumer inflation data on Wednesday, with the overall consumer price index expected to be 7% year-on-year, adding to fears that it could affect the trajectory of the Fed's interest rate hike.
The central event of the week is the start of the fourth quarter reporting season on Friday, when major banks are expected to show a rise in quarterly core earnings thanks to new lending and higher treasury bond yields.
"We are aware of concerns about Omicron, inflation and policy tightening, but corporate America's earnings should again help justify why stocks are near all-time highs," added Detrick.
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Shares in International Business Machines fell 4.5% after UBS downgraded the stock to 'sell' and lowered its target price.
Falling issues dominated gains by a ratio of 1.23 to 1 on the NYSE and by a ratio of 1.48 to 1 on the Nasdaq.
The S&P index recorded 14 new 52-week highs and no new lows, while the Nasdaq recorded 16 new highs and 59 new lows.
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Eleena Timmons