US stocks trade mixed as investors digest latest Fed comments on rate outlook

• US stocks traded mixed as investors digested the latest Fed comments on the outlook for interest rates.
• Two regional Fed presidents see rates rising over 5% in order for the central bank to rein in inflation.

US stocks traded mixed on Monday as investors digested the latest comments from Federal Reserve officials on their outlook for interest rates.

San Francisco Fed President Mary Daly and Atlanta Fed President Raphael Bostic said they expected the central bank to raise rates past 5% and hold them there to rein in inflation. Already, the fed funds rate is targeted between 4.25%-4.5%, with the CME FedWatch tool showing 80% odds of another 25-basis-point hike to come in February.

Investors also have their eye on Thursday's December Consumer Price Index report, a key inflation measure that will influence central bankers in their next policy move.

Here's where US indexes stood at the 4:00 p.m. closing bell on Monday:

• S&P 500: 3,892.09, down 0.08%
• Dow Jones Industrial Average: 33,517.65, down 0.34% (112.96 points)
• Nasdaq Composite: 10,635.65, up 0.63%

Here's what else is going on:

• Bed Bath & Beyond stock spiked 30% as Reddit users speculated on hopes that an acquisition will lift the troubled retailer.
• Stock valuations are still too high, and the market could fall as much as 30%, Bank of America warned.
• The S&P 500 could slide another 22%, since investors' view of the downside is still too mild, Morgan Stanley warned.
• The Treasury yield curve on the 2- and 10 -ear notes is now at its deepest inversion in over 40 years.
• The US's chances of dodging a recession are growing, given the low number of layoffs, according to a top Moody's economist.
• Meta will be the top-performing mega-cap internet stock in 2023 despite sinking 64% last year, Jefferies predicted.

In commodities, bonds, and crypto:

• Oil prices climbed, with West Texas Intermediate up 1.31% to $74.74 a barrel. Brent crude, the international benchmark, rose 0.04% to $79.68 a barrel
• Gold moved 0.29% higher to $1,871.24 per ounce
• The 10-year yield ticked up 5 basis points to 3.517%
• Bitcoin climbed 1.79% to $17,261.80