By Lewis Krauskopf, Ankika Biswas and Amruta Khandekar

(Reuters) – Wall Street’s main indexes ended lower on Monday, with real estate and discretionary sectors leading broad declines, as investors digested comments from U.S. Federal Reserve officials about plans for interest rate hikes and looked for next catalysts after last week’s big stock market rally.

Losses accelerated toward the end of the up-and-down session, with focus turning to Tuesday’s producer price index report and markets highly sensitive to inflation data.

Earlier on Monday, Fed Vice Chair Lael Brainard signaled that the central bank would will likely soon slow its interest rates hikes. Her comments somewhat buoyed sentiment for equities that had been dampened after Federal Reserve Gov. Christopher Waller on Sunday said the Fed may consider slowing the pace of increases at its next meeting but that should not be seen as a “softening” in its commitment to lower inflation.

A massive equity rally late last week was set off by a softer-than-expected inflation report that boosted investor hopes the Fed could dial back on its monetary tightening that has punished markets this year.

“There is still a sensitivity to Fed speak… One was a little hawkish, one was a little dovish,” said Eric Kuby, chief investment officer at North Star Investment Management Corp.

The Dow Jones Industrial Average fell 211.16 points, or 0.63%, to 33,536.7, the S&P 500 lost 35.68 points, or 0.89%, to 3,957.25 and the Nasdaq Composite dropped 127.11 points, or 1.12%, to 11,196.22.

The S&P 500 last week posted its biggest weekly percentage gain since late June, while the tech-heavy Nasdaq notched its best week since March.

More Fed officials are due to speak later this week along with a slew of data, including on retail sales and housing, and earnings reports from major retailers.

“It just makes sense the market wants to pause and really both try to make sense of the trajectory (of Fed policy) and what the next drivers are going to be,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Among S&P 500 sectors, real estate fell 2.7%, consumer discretionary dropped 1.7% and financials declined 1.5%.

In company news, Amazon (NASDAQ:AMZN) shares fell 2.3% as The New York Times on Monday reported the company was planning to lay off about 10,000 people in corporate and technology jobs starting as soon as this week.

Shares of Biogen Inc (NASDAQ:BIIB) and Eli Lilly (NYSE:LLY) gained 3.3% and 1.3%, respectively, after the failure of Swiss rival Roche’s Alzheimer’s disease drug candidate.

Declining issues outnumbered advancing ones on the NYSE by a 2.23-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favored decliners.

The S&P 500 posted 15 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 72 new highs and 74 new lows.

About 11.5 billion shares changed hands in U.S. exchanges, compared with the 12.1 billion daily average over the last 20 sessions.

Investing.com — The Dow struggled for direction, but ended Monday in the red as investors digested remarks from the Federal Reserve officials insisting further rate hikes were ahead, albeit at a slower pace, as the fight against inflation was far from over.

The Dow Jones Industrial Average fell 0.6%, or 211 points, and the Nasdaq was 1.1% lower.

Fed Vice Chair Lael Brainard said Monday that it probably would be “appropriate soon to move to a slower pace of increases,” though added that there still was “additional work to do on raising rates.”

The remarks arrived after Fed Governor Christopher Waller pushed back against investor bets on a pause on rate hikes, insisting that monetary policy tightening “isn’t ending in the next meeting or two.”

Health care, a defensive corner of the market, ended the day just above the flatline, with Moderna and Biogen leading to the upside.

Moderna (NASDAQ:MRNA) jumped more than 4% after reporting that its new COVID-19 boosters provided increased protection against Omicron subvariants than its original formula.

Biogen (NASDAQ:BIIB) advanced more than 3% on news that Roche’s Alzheimer’s drug candidate failed to show evidence of slowing dementia progression in two drug trials.

Tech, meanwhile, was mostly lower, pressured by a more than 2% decline in Microsoft (NASDAQ:MSFT). Meta Platforms Inc (NASDAQ:META) bucked the trend, however, rising more than 1%.

Advanced Micro Devices (NASDAQ:AMD) reversed some early-day gains but ended up 1% higher after receiving an upgrade from Baird and UBS.

UBS upgraded AMD to outperform from neutral and lifted its price target on the stock to $95 from $75, on expectations that demand for chips is set to resume as the glut in chip inventories is nearing a peak.

Amazon.com (NASDAQ:AMZN) fell more than 2% as the e-commerce giant reportedly plans to lay off about 10,000 employees as soon as this week.

Energy stocks shrugged off a slump in oil prices after OPEC cut its estimate on global oil demand amid a weaker global economic backdrop.

Valero Energy Corporation (NYSE:VLO) and Chevron Corp (NYSE:CVX) led the gains in the sector.

On the earnings front, oat-based drinks maker Oatly (NASDAQ:OTLY) reported a larger-than-expected quarterly loss as revenue fell short of Wall Street estimates, sending its shares more than 12% lower.

In cryptocurrency-related news, Binance, the world’s largest exchange by trading volume, said it would launch a recovery fund to cash-strapped crypto companies starved of liquidity in the wake of the collapse of FTX.