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US STOCKS-Wall Street falls with tech shares, investors assess rate outlook

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.)


Philadelphia SE Semiconductor index slumps to near 2-year low


U.S. bond market shut for Columbus Day holiday


S&P 500 tech sector leads declines


Indexes down: Dow 0.1%, S&P 500 0.6%, Nasdaq 0.9%

(Updates to late afternoon, adds NEW YORK dateline)

By Caroline Valetkevitch

NEW YORK, Oct 10 (Reuters) - U.S. stocks declined on Monday with investors pulling out of technology shares and chipmakers as they assessed U.S. efforts to hobble China's semiconductor industry and the impact of more interest rate hikes.

Federal Reserve Vice Chair Lael Brainard said tighter U.S. monetary policy has begun to be felt in an economy that may be slowing faster than expected, but the full brunt of Fed interest rate increases still won't be apparent for months.

Despite growing concerns by a number of economists and analysts that the Fed's interest rate hikes could increase unemployment, Chicago Fed President Charles Evans continued to back the central bank's attempt to lower inflation, saying that while it sounds "optimistic" he believed it could do so "while also avoiding recession."

"People are worried about the economy. People are worried about a possible recession," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

The Philadelphia SE Semiconductor index dropped 3.4% and touched a two-year low, after the Biden administration published a set of export controls on Friday, including a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. equipment.

Shares of Nvidia Corp were down more than 3%, while shares of Qualcomm Inc, Micron Technology Inc and Advanced Micro Devices were also lower.

The U.S. third-quarter earnings season is set to kick off on Friday, with results from some of the major banks.

Earnings for S&P 500 companies have now been estimated to rise 4.1% for the latest three months, down from an increase of 11.1% expected at the beginning of July, as more analysts price in a downturn next year, according to Refinitiv data.

Shares of Microsoft were down 2%.

The Dow Jones Industrial Average fell 41.55 points, or 0.14%, to 29,255.24, the S&P 500 lost 23.05 points, or 0.63%, to 3,616.61 and the Nasdaq Composite dropped 95.65 points, or 0.9%, to 10,556.75.

Investors also awaited inflation reports through the week, including consumer prices data, which is expected to have likely risen last month.

The U.S. bond market was shut for the Columbus Day holiday on Monday. (Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru; Additional reporting by Bansari Mayur Kamdar; Editing by Anil D'Silva and Aurora Ellis)