Treasury chief plays down fears of inflation

Wall Street ended mixed as slumps in several Big Tech companies offset gains in many other parts of the market Monday.

Because of their huge size, the drops in Apple, Google’s parent company and other major technology stocks pulled the S&P 500 to a loss of 0.5% even though more stocks rose than fell in the index.

The tech-heavy Nasdaq dropped 2.4%, while the Dow Jones Industrial Average rose 1%.

Technology companies have been sliding in recent weeks as investors start to doubt whether the huge gains they made during the pandemic months can continue.

Treasury yields rose again. Trading has been choppy in recent weeks as investors fret over a sudden spike in long-term interest rates in the bond market. The S&P 500 is coming off its first weekly gain in three weeks.

“Interest rates reflect a real economic recovery and they’re not going back down anytime soon,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “Right now, the market is struggling with that.”

Bond yields moved higher again, and the yield on the 10year Treasury note rose to 1.59%. Investors have been betting that trillions of dollars in coming government stimulus will help lift the economy out of its coronavirus-induced malaise. Some investors also are betting that stimulus and an improving economy will result in rising inflation.

The U.S. economic aid package, passed narrowly by the Senate on Saturday, provides direct payments of up to $1,400 for most Americans and extends emergency unemployment benefits. It’s a victory for President Joe Biden and his Democratic allies, and final congressional approval is expected this week.

“That eliminates a major short-term risk and also puts a lot of money into the economy in the short term,” McMillan said.