US open: Stocks fall on hawkish Federal Reserve speakers

US stocks declined on Friday as oil prices dropped and as investors digested hawkish remarks from Federal Reserve speakers.

At 1551 BST the Dow Jones Industrial Average fell 1.05% to 18,285.01 points, the S&P 500 dropped 1.22% to 2,154.76 points and Nasdaq edged down 1.13% to 5,199.93 points.

Boston Fed President Eric Rosengren said on Friday “a reasonable case can be made” for raising interest rates gradually as the risks facing the economy are more in balance. The dollar strengthened against most currencies following his remarks, rising 0.25% against the pound, 0.42% against the euro and 0.34% versus the yen.

His comments echoed that of Dallas Fed President Rob Kaplan who said on Friday the case for a rate hike has improved in the last few months.

However, the usually dovish Fed Governor Daniel Tarullo on Friday told CNBC he wants to see more evidence before raising rates. Although he said he couldn’t rule out a hike this year.

Earlier in the week, San Francisco Fed President John Williams said the central bank should increase rates sooner rather than later.

The market is now looking ahead to a speech scheduled for Monday by the Fed’s Lael Brainard, a leading dove.

Fed officials are speaking before the September policy meeting blackout on Tuesday, which means policymakers are unable to comment until the interest rate decision. The Fed meets on 20-21 September.

Meanwhile, oil retreated after surging in the previous session when data from the US Energy Information Administration showed crude inventories fell by 14.5m barrels in the week ended 2 September. Analysts had been expecting a gain of 225,000 barrels.

West Texas Intermediate was down 2.7% to $46.35 a barrel while Brent was 2.8% weaker at $48.62 at 1607 BST.

On the data front, the Commerce Department said US wholesale inventories remained unchanged in July after increasing 0.3% in June. Wholesale sales fell 0.4% in July, reversing a 1.7% increase in June.

Elsewhere, Chinese inflation figures were also in focus, as consumer price inflation rose 1.3% in August from a year earlier, down from July’s 1.8% and marking the lowest level since October 2015. It was also weaker than the 1.7% jump expected by economists.

The country’s producer price index fell 0.8% in August from a year ago, which was more or less in line with expectations and compared to a 1.7% fall in July.

On the corporate front, shares in technology giant Apple nudged lower on pre-order day for the new iPhone 7.

Restoration Hardware surged after its quarterly sales late on Thursday beat expectations, while Finisar Corp also rose sharply after stronger-than-forecast quarterly results.

Lexicon Pharmaceuticals shares jumped as the company reported positive results from a trial of its treatment for Type 1 diabetes.

CAI International Inc. was on the back foot after the logistics company said it expects a $2.6m impact from its exposure to the bankruptcy of South Korean shipping company Hanjin Shipping Co.