US stocks end lower ahead of Powell, jobs data; bitcoin surges

By Stephen Culp

NEW YORK (Reuters) -Wall Street stocks closed lower on Monday, backing away from record highs, while U.S. Treasury yields ticked higher as investors looked ahead to key jobs data and Federal Reserve Chair Jerome Powell’s congressional testimony later in the week.

Bitcoin was being closely watched as the cryptocurrency inched closer to its first record high since November 2021.

After European stocks backed off from record highs, the major U.S. equity indexes followed suit, failing to eke out further gains following Friday’s record-setting rally.

All three U.S. indexes struggled for gains through much of the range-bound session, but lost momentum in the final hour.

The S&P 500 closed modestly lower, while the Nasdaq and the Dow registered more pronounced declines.

Market participants appeared to be showing caution ahead of Powell’s two-day congressional testimony on Wednesday and Thursday, the European Central Bank’s policy decision and the Labor Department’s crucial February jobs report to be released early on Friday.

“Nothing is really happening (Monday) and that’s why the stock market is undulating within small boundaries,” said Sam Stovall, chief investment strategist of CFRA Research in New York. “The market is waiting for Jerome Powell’s testimony to Congress, it’s waiting for employment data on Friday and wondering whether we are going to get any kind of meaningful digestion of recent gains.”

Powell’s testimony and the jobs data will be scrutinized for any clarification on the timing and extent of the Fed’s expected cuts to its key policy interest rate this year.

On average, analysts believe the U.S. economy added 200,000 jobs in February, and the unemployment rate held firm at 3.7%.

The Dow Jones Industrial Average fell 97.55 points, or 0.25%, to 38,989.83, the S&P 500 lost 6.13 points, or 0.12%, to 5,130.95 and the Nasdaq Composite dropped 67.43 points, or 0.41%, to 16,207.51.

European shares settled just south of all-time highs as investors digested recent gains and looked ahead to the European Central Bank’s monetary policy meeting on Thursday.

The pan-European STOXX 600 index lost 0.03%, and MSCI’s gauge of stocks across the globe shed 0.01%.

Emerging market stocks rose 0.51%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.57% higher, while Japan’s Nikkei rose 0.50%.

Bitcoin rose to a more than two-year peak. The cryptocurrency was last up 8.1% at $67,655, approaching an intraday record reached in November 2021.

“Bitcoin is a very high-volatility, speculative, momentum-related play and it always has been,” Oliver Pursche, senior vice president at Wealthspire Advisors in New York. “The one thing it’s good for from an analyst’s perspective is it’s an indicator of risk sentiment and investors’ willingness to take on risk.”

The dollar was essentially unchanged against a basket of world currencies. The dollar index fell 0.03%, with the euro up 0.16% to $1.0854.

The Japanese yen weakened 0.27% versus the greenback at 150.53 per dollar, while Sterling was last trading at $1.2689, up 0.31% on the day.

U.S. Treasury yields rose. Benchmark 10-year notes last fell 9/32 in price to yield 4.217%, from 4.182% late on Friday.

The 30-year bond last fell 14/32 in price to yield 4.3522%, from 4.327% late on Friday.

Oil prices reversed earlier gains as demand concerns offset a widely expected move on the part of OPEC+ to extend its output cuts.

“With oil prices down even after OPEC said it’s going to keep a rein on output, oil seems to be telling a different story from what equities are saying,” Stovall said. “It implies the oil market is worried about global economic growth and there could be more problems to emanate from China that we are currently anticipating.”

U.S. crude fell 1.54% to settle at $78.74 per barrel, while Brent settled at $82.80, down 0.9% on the day.

Gold surged as market participants solidified their bets that the Fed would begin cutting interest rates in June.

Spot gold added 1.6% to $2,116.77 an ounce.

(Reporting by Stephen Culp; Editing by Bernadette Baum, Will Dunham and Leslie Adler)