US close: Stocks lower following Senate midterm results

dl nyse new york stock exchange wall st street city finance dow jones nasdaq sp finance dollar dollars us usa united states of america 2 — New York Stock ExchangeSharecast photo / Josh White

Wall Street stocks closed lower on Monday after major indices recorded solid gains last week.

At the close, the Dow Jones Industrial Average was down 0.63% at 33,536.70, while the S&P 500 lost 0.89% to 3,957.25 and the Nasdaq Composite saw out the session 1.12% weaker at 11,196.22.

The Dow closed 211.16 points higher on Monday, reversing gains recorded in the previous session's CPI-fuelled rally.

Politics were in focus on Monday, with investors digesting news that the Democratic Party will maintain control of the Senate following the 2022 US midterm elections.

Comments from Christopher Waller also drew an amount of investor attention, with the Federal Reserve governor stating the central bank was "at a point we can start thinking maybe of going to a slower pace". However, he also warned, "we're not softening."

"Quit paying attention to the pace and start paying attention to where the endpoint is going to be. Until we get inflation down, that endpoint is still a ways out there," said Waller.

Federal Reserve vice chair Lael Brainard also cautioned that the bank had "additional work to do" in its battle against inflation but said it may "soon" be time for the Fed to bring its string of 0.75% interest rate rise to an end and move at a more "deliberate" pace.

"We've done a lot, but we have additional work to do both on raising rates and sustaining restraint to bring inflation down to 2% over time," she said. Brainard added that while October's cooler-than-expected inflation report was "reassuring", it should be noted that it was only a "preliminary" reading.

Wall Street's "fear gauge", the Cboe Volatility Index, sat at 23.73 at the close of trading after falling to 22.5 early in the session - its lowest level since August - after trading above 30 points for almost all of October.

As stocks traded lower, Treasury yields advanced on Monday, with both the 2-year Treasury and benchmark 10-year notes up a little bit more than one basis point at 4.404% and 3.873%, respectively.

On the macro front, consumer inflation expectations for the coming year rose to 5.9% in October from 5.4% in September, according to the Federal Reserve Bank of New York. The median expected change in gas prices increased by 4.3 percentage points to 4.8% - the largest one-month increase on record.

In the corporate space, Tyson Foods missed fourth-quarter earnings per share estimates by $0.07 despite beating revenue expectations for the period amid contracting margins.

Walmart, Home Depot, Target, Lowe's, Macy's, and Kohl's will all issue their latest quarterly statements before the week is out.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Merck & Co. Inc. (MRK) $100.35 2.44%
Johnson & Johnson (JNJ) $171.91 1.57%
Visa Inc. (V) $206.94 0.91%
International Business Machines Corporation (CDI) (IBM) $144.20 0.72%
Salesforce.Com Inc. (CRM) $158.66 0.59%
Travelers Company Inc. (TRV) $182.77 0.53%
McDonald's Corp. (MCD) $272.27 0.32%
Amgen Inc. (AMGN) $285.22 0.10%
Chevron Corp. (CVX) $186.55 0.05%
Verizon Communications Inc. (VZ) $38.32 0.03%