Wall Street falls from record highs as earnings-heavy week kicks off. U.S. stock indexes fell from record highs on Monday as locally listed Chinese firms tumbled on tighter regulations in the mainland, marking a poor start to a week packed with technology earnings and a Federal Reserve meeting.
China last week announced sweeping new rules on private tutoring and online education firms, the latest in a series of crackdowns on the technology sector that have roiled financial markets this year.
E-commerce major Alibaba Group and search engine Baidu Inc, two of the largest listed Chinese stocks in the United States, slipped more than 5% each.
A two-day meeting of the Fed starting on Tuesday will also be watched by investors for more clues on the central bank’s planned tightening of monetary policy, given that inflation has been accelerating sharply in recent months.
The S&P 500 has tended to perform poorly in weeks with a Fed meeting this year due to fears that the central bank could signal an earlier-than-anticipated trimming of its massive stimulus program.
“The Fed is not going to be explicit in its language and the market is going to pay more keen attention to the more local voices from the Fed to get a better idea on the interest rate cycle,” said Sean O’Hara, president at Pacer ETFs.
“If we start seeing any signs of a less supportive Fed, it’ll be a cause for concern.”