US stocks have fallen as Apple shares dropped following a broker downgrade, and investors continued to weigh chances of an aggressive interest rate cut by the Federal Reserve later this month. Apple fell 2.2 per cent and was the biggest drag on the S&P 500 and Nasdaq.

The technology index was down 0.7 per cent on Monday, while the healthcare index fell 0.8 per cent, weighed down by US President Donald Trump’s recent statement about an upcoming executive order that would lower prescription drug prices. Surprisingly, strong US jobs data on Friday has forced traders to temper hopes of a sharp rate cut at the central bank’s July 30-31 policy meeting, even as a reduction is still expected.

The Dow Jones Industrial Average fell 115.98 points, or 0.43 per cent, to 26,806.14 on Monday, the S&P 500 lost 14.46 points, or 0.48 per cent, to 2975.95 and the Nasdaq Composite dropped 63.41 points, or 0.78 per cent, to 8098.38.

A week ago, the market forecast an 80.1 per cent chance of a 25-basis-point cut, and a 19.9 per cent chance of a 50-basis-point cut, according to CME Group’s FedWatch tool. In afternoon trade, the chances were 92 per cent and eight per cent, respectively. Investors might get an opportunity to gauge near-term monetary policy thinking during Fed Chairman Jerome Powell’s semi-annual testimony to the US Congress on July 10-11.

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