Wall St loses ground after Powell urges caution on rate cuts
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Retail sales rise 0.4% in October, above forecasts
Applied Materials down after forecasting Q1 revenue below estimates
Domino's Pizza gains after Berkshire Hathaway takes stake
Indexes down: Dow 0.34%, S&P 500 0.68%, Nasdaq 1.24%
Updated at 09:40 a.m. ET/ 1440 GMT
By Lisa Pauline Mattackal and Purvi Agarwal
Nov 15 (Reuters) -Wall Street's main indexes tumbled on Friday after Federal Reserve Chair Jerome Powell said there was no need to rush interest-rate cuts, pushing up U.S. Treasuryyields and pressuring equities.
In a speech on Thursday, Powell pointed to ongoing economic growth, a solid job market, and inflation above the Fed's 2% target as reasons the central bank can afford to be careful as they determine the pace and scope of rate cuts going forward.
Powell's comments came after bothconsumer andproducer prices data this week pointed to persistent inflation. On Friday, data showed U.S. retail sales increased slightly more than expected in October, but underlying momentum in consumer spending appeared to slow at the start of the fourth quarter.
Traders increased bets that the Fed will keep rates on hold at its December meeting - pricing in a 41.3% chance, compared with 14% a month ago, according to the CME FedWatch tool.
"The retail sales number was overall pretty good. That's exactly what Powell was talking about yesterday, where if the economy continues to be reasonably strong and inflation is approaching our target, they can afford to be patient and go slower with rate cuts than previously thought," said Mike Dickson, head of research and quantitative strategies at Horizon Investments.
The Dow Jones Industrial Average .DJI fell 149.62 points, or 0.34%, to 43,601.24, the S&P 500 .SPX lost 40.21 points, or 0.68%, to 5,908.96 and the Nasdaq Composite .IXIC lost 237.47 points, or 1.24%, to 18,870.18.
The small-cap Russell 2000 index.RUT was down 0.2%.
Higher Treasury yields pressured megacap stocks. Nvidia NVDA.O edged 1.8% lower, Apple AAPL.O dropped 1% and Microsoft MSFT.O was down 1.7%.
The losses pulled down the information technology index.SPLRCT by 1.5%, while the tech-heavy Nasdaq led declines among the majorindexes with an over 1% loss.
The Philadelphia SE Semiconductor index .SOX slipped 2.2%, bogged down by a 8.8% decline in Applied Materials AMAT.O after it forecast first-quarter revenue below Wall Street estimates on Thursday.
All three major U.S. stock indexes were headed for weekly losses as asharp post-election rally fizzled out and market focus shifted to the state of the economy and potential inflation risks under a new administration.
Stocks of vaccine makers dipped after the President-elect selected Robert F Kennedy Jr, who has spread misinformation on vaccines, to head the Department of Health and Human Services.
BioNTech BNTX.O dropped 5%, while Moderna MRNA.O and Novavax NVAX.O fell more than 4%. Pfizer PFE.N dipped 4.9%.
"We are getting more visibility into who's going to be surrounding Trump and what their policies represent. And that's caused a little bit of the pause lately," said Dickson of Horizon Investments.
Warren Buffett's Berkshire Hathaway BRKa.N said on Thursday it made new investments in Domino's Pizza DPZ.N and sold its entire stake in Ulta Beauty ULTA.O.
Domino's shares were up 2%, while Ulta was down 2.5%.
Advancing issues outnumbered decliners by a 1.06-to-1 ratio on the NYSE and by a 1.5-to-1 ratio on the Nasdaq.
The S&P 500 posted 3 new 52-week highs and 8 new lows while the Nasdaq Composite recorded 14 new highs and 91 new lows.
Monthly change in US retail sales https://reut.rs/4i10zGa
Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Devika Syamnath
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