U.S. Stocks Tumble Amid Fed Chair's Interest Rate Projections

U.S. stocks fell on Monday following Federal Reserve Chair Jerome Powell's comments that the central bank is not rushing to lower interest rates. Powell indicated potential additional cuts amounting to 50 basis points this year. Economic data revisions have mitigated some previously identified risks.

U.S. stocks extended losses on Monday after Federal Reserve Chair Jerome Powell indicated that the central bank is not in a hurry to lower interest rates and expects two more cuts, totaling 50 basis points, this year if economic conditions meet expectations.

During a National Association for Business Economics conference in Nashville, Tennessee, Powell noted that recent revisions to economic growth, savings rates, and personal income data have reduced certain "downside risks" the Fed had been monitoring.

Earlier this month, the Fed initiated a new easing cycle with a substantial 50 basis point rate cut. "Powell's remarks reaffirm the Fed's data-dependent stance while suggesting a positive outlook on the economy and labor market stability," said Quincy Krosby, Chief Global Strategist at LPL Financial.

The S&P 500 remained relatively stable before Powell's speech, while the Dow Jones Industrial Average dropped 305.54 points (0.72%) to 42,007.46, the S&P 500 fell 24.83 points (0.43%) to 5,713.34, and the Nasdaq Composite declined 94.61 points (0.52%) to 18,024.99.

This week's key economic reports include Friday's monthly payrolls. Notably, CVS Health saw a 2% rise after hedge fund Glenview Capital Management announced plans to discuss operational improvements with the healthcare company's executives.

(Additional reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Maju Samuel and Richard Chang)

(With inputs from agencies.)