Wall Street closed lower on Monday in New York, with stocks extending their slide after US Federal Reserve Chairman Jerome Powell hinted at a more aggressive tightening of monetary policy than previously anticipated, adding to uncertainties regarding the Russian invasion of Ukraine.

While all three major US stock indexes ended well off session lows, they snapped four-session winning streaks on the heels of their biggest weekly percentage gains since early November 2020.

The Dow Jones Industrial Average fell 0.6 per cent, the S&P 500 finished flat and the Nasdaq Composite dropped 0.4 per cent. Despite the negative lead, the Australian sharemarket is set for gains, with futures at 6.59am AEDT pointing to a rise of 80 points, or 1.1 per cent, at the open.

The central bank must move “expeditiously” to combat inflation, Powell told the National Association for Business Economics conference, adding that bigger-than-usual interest rate hikes could be deployed if needed.

“Much of the news today was telegraphed last week in (Powell’s) comments,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. “The difference is there was some question regarding whether a 50 basis-point rate hike might be a course of action sooner rather than later.”

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Fed funds futures now imply a 60.7 per cent chance of a 50 basis-point hike in key interest rates at the Fed’s next meeting in May, up from 52 per cent before the text of Powell’s speech was released.

“Some Fed governors have been vocal about front-end loading some of those hikes, putting them on the books sooner rather than later,” Keator added. “But I don’t think the markets should anticipate a series of 50 basis-point rate hikes between now and the end of the year.”

Fighting raged on in Ukraine as efforts to negotiate an end to the conflict appeared to be making little progress.