The Dow Jones Industrial Average slid more than 100 points on Monday, eroding some of its modest gains from last week, as investors opted to stay on the sidelines ahead of meetings from the Bank of Japan and Federal Reserve later in the week.
Crude oil prices also vacillated between CLM6, -0.73% small gains and losses.
The Dow Jones Industrial Average dropped 110 points, or 0.6%, to 17,895, as Exxon Mobil Corp (NYSE:XOM) -1.29%, United Technologies (NYSE:UTX) -1.02% and E. I. DuPont (NYSE:DD) -1.62% led the blue-chip average lower.
Meanwhile, the S&P 500 -0.60% lost 10 points, or 0.4%, to 2,082.
The Nasdaq Composite -0.48% lost 13 points, or 0.3%, to 4,893.
Central bank policy is likely to be a prominent theme this week. Signs of rising inflation in the U.S. might influence the Fed to adopt slightly more hawkish language in its monetary policy statement, which is expected to be released after the close of the meeting on Wednesday.
“People will be keen to see if there’s a switch in tone from the recent more dovish comments,” said Oliver Pursche, Chief Executive Officer at Bruderman Brothers. “I would not be surprised if you saw something like ‘we’re holding off because of stuff that’s going on internationally but the U.S. economy is ready for a hike’.”
The Fed—which raised interest rates in December for the first time in nearly a decade—is widely expected to leave rates unchanged this week. A major question for investors right now is whether the Fed is on course to raise interest rates again this year and, if so, how many times in 2016 rates are likely to go up.
“I still believe we’ll see two rate hikes from the Fed this year and the FOMC statement will confirm its intentions to do so. What the markets are looking for though is an idea of when we can expect them, with the June and December meetings looking the most likely,” said Craig Erlam, senior market analyst at Oanda.
There were no Fed speakers on tap for Monday as the central bank is in its “blackout period” ahead of this week’s meeting.
The Bank of Japan announces its policy decision on Thursday and is expected to launch additional easing measures.
Data: New home sales declined by 1.5% to a seasonally adjusted annual rate of 511,000 in March, according to the Commerce Department. But a big upward revision to February’s number was seen as evidence that the housing market’s steady recovery continued.
On Tuesday, the data calendar features durable-goods orders, consumer confidence and another home price number on the docket.
Movers: Companies representing more than a third of the S&P 500 market cap will report earnings this week, beginning with a busy lineup on Monday.
Xerox Corp (NYSE:XRX) -12.13% reported first-quarter earnings slightly below forecasts, but beat on revenue.
Private-equity firm KKR & Co LP (NYSE:KKR) -2.41% posted a bigger-than-forecast loss for the first quarter.
Tribune Publishing Co. (NYSE:TPUB) +57.98% shares soared after Gannett Co (NYSE:TGNA) made an unsolicited bid for the company in a deal valued at $815 million.
Halliburton (NYSE:HAL) -0.60% was slated to report earnings on Monday morning, but said on Friday it is delaying the release of its first-quarter report until next month.
Express Scripts Holding Co. (NASDAQ:ESRX) -0.21% and Pioneer Natural Resources Co. (NYSE:PXD) -0.01% are among companies slated to release results after the bell.
Apple Inc (NASDAQ:AAPL) -0.67% reports earnings on Tuesday and is expected to report its first year-over-year decline in iPhone unit sales. Shares slipped 0.3% premarket, poised to add to losses from last week, when iPhone sales estimates were lowered by Raymond James.
Other markets: Stocks in Asia closed lower almost across the board, inspiring losses for Europe as well.
The dollar dropped against most other major currencies, sending the ICE dollar index DXY down 0.3% to 94.7940. The greenback slipped against the pound (GBP/USD), which bought $1.4499, after President Barack Obama urged Brits to vote to remain in the European Union.
Saudi Arabia’s deputy crown prince on Monday said less than 5% of state-owned Saudi Arabian Oil Co., known as Saudi Aramco, will be publicly offered in a move that will value the company at between $2.0 trillion and $2.5 trillion.