Stocks fall on Wall Street, led by a slide in tech
Technology companies led a broad slide for stocks on Wall Street and bond yields rose again Monday as investors look ahead to the upcoming company earnings reporting season and what it will reveal about the impact inflation is having on corporate profits.
The S&P 500 fell 1.7%, adding to its recent losses. The Dow Jones Industrial Average fell 1.2% and the tech-heavy Nasdaq slid 2.2%. Both the benchmark S&P 500 and the Nasdaq are coming off their first weekly losses in four weeks.
Bond yields rose. The yield on the 10-year Treasury climbed to 2.78% from 2.71% late Friday. Bonds have been rising amid expectations of higher interest rates as the Federal Reserve moves to squelch inflation.
The market “is still reacting to what’s happening in the bond market,” said Willie Delwiche, investment strategist at All Star Charts. “You have yields, not just in the U.S. but around the world, moving sharply higher and that’s putting pressure on (stocks) generally. That was the story last week, and it’s the story this week.”
Higher rates hurt all kinds of investments, particularly stocks that are seen as the most expensive, such as those of Big Tech companies. As bonds offer better returns for less risk, that makes pricey stocks less attractive, which is why the heaviest selling has been concentrated in technology and other growth stocks as inflation fears have rattled the market.
Technology stocks were again the biggest weights on the market Monday. Microsoft fell 3.9% and Apple shed 2.6%.
All 11 sectors in the S&P 500 fell. The index ended down 75.75 points to 4,412.53. The Dow lost 413.04 points to 34,308.08, while the Nasdaq slid 299.04 points to 13,411.96.
Small company stocks held up better than the rest of the market. The Russell 2000 fell 14.24 points, or 0.7%, to 1,980.32.
Energy stocks were among some of the biggest losers as they followed oil prices lower. U.S. crude oil prices fell 4% and Occidental Petroleum slumped 3.9%, the biggest decliner in the S&P 500.
Wall Street will get several updates this week that could provide more clues about how the broader economy has been handling rising inflation.
The Labor Department on Tuesday will release its report on consumer prices for March, while the Commerce Department will release its March retail sales report on Thursday. Those reports have been closely watched as investors try to figure out how rising prices have been impacting consumer spending. Any significant slowdown in consumer spending would likely mean a sharper-than-expected slowdown in economic growth this year.
Wall Street will also start to get more details about how individual companies performed during the first quarter and what they expect moving ahead.
Delta Air Lines and JPMorgan Chase will report their latest financial results Wednesday, while UnitedHealth Group, Wells Fargo and Citigroup will report their results Thursday.
Gold for June delivery rose $2.60 to $1,948.20 an ounce. Silver for May delivery rose 17 cents to $24.99 an ounce and May copper fell 9 cents to $4.63 a pound.
The dollar rose to 125.46 Japanese yen from 124.37 yen. The euro rose to $1.0890 from $1.0885.