Investors await the latest take from Fed on inflation

NEW YORK, June 14, (AP): Stocks fell on Wall Street Monday in a sluggish start to the week as investors await the latest take from the Federal Reserve on inflation.

The S&P 500 fell 0.2% as of 11:30 a.m. Eastern. The Dow Jones Industrial Average fell 214 points, or 0.6%, to 34,265 and the Nasdaq rose 0.3%.

The benchmark S&P 500 is sitting just below its latest record high set on Friday. It is also coming off its third weekly gain in a row. Trading has been choppy as investors gauge the economic recovery and rising inflation’s impact on its trajectory and the Fed’s next move. Banks, health care and industrial companies had some of the broadest losses. Big technology stocks helped offset some of the slide. Apple rose 1.9% and Adobe rose 3.6%.

Energy companies held up better than most of the market as crude oil prices edged higher. Marathon Oil rose 1.6%.

The Fed is meeting this week and will release a statement on Wednesday. Investors have been worried that the Fed could ease up on bond purchases and other stimulus measures as the economy recovers. No policy changes are expected immediately, but comments on a shift in policy could jostle an already skittish market.

Fed officials have maintained that any rise in inflation will be temporary as the economy recovers.

Lordstown Motors sank 18.4% after the CEO and CFO resigned as problems mount for the startup electric truck maker.

Novavax gave up an early gain and fell 2.6%. The vaccine maker said its COVID-19 shot was highly effective against the disease and also protected against variants in a large study in the U.S. and Mexico. The company is facing raw-material shortages, though, and plans to seek authorization for the shots by the end of September. Bond prices fell. The yield on the 10-year Treasury note rose to 1.49% from 1.46% late Friday.

Gained

London and Frankfurt opened higher while Tokyo also gained. Markets in China and Hong Kong were closed for a holiday.

Trading has been muted as investors wait for Wednesday’s Fed meeting for signs of whether U.S. central bankers are turning more hawkish following a rise in inflation. No policy changes are expected immediately, but any shift in language in Fed comments might fuel fears bond purchases and other stimulus will wind down.

“Expectations are for the Fed to maintain its ultra-dovish policy stance and refrain from discussing any form of tapering just yet,” said Mizuho Bank in a report.

In early trading, London’s FTSE 100 rose 0.3% to 7,156.76 and the DAX in Frankfurt added 0.5% to 15,775.29. The CAC 40 in Paris gained 0.6% to 6,640.68.

On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were up 0.1%.

On Friday, the S&P 500 turned in a third weekly gain after rising 0.2%. The Dow Jones Industrial Average added less than 0.1% while the Nasdaq gained 0.4%.

In Asia, the Nikkei 225 in Tokyo gained 0.7% to 29,161.80 while the Kospi in Seoul added less than 0.1% to 3,248.36.

India’s Sensex lost 0.3% to 52,306.12. New Zealand and Bangkok gained while Singapore and Jakarta retreated.

Fed officials say higher inflation should be short-lived. That was supported by a report last week that showed a rise in consumer prices in May was due mostly to temporary factors.

In energy markets, U.S. benchmark crude rose 51 cents to $71.42 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 62 cents on Friday to $70.91. Brent crude, the price basis for international oils, advanced 62 cents to $73.31 per barrel in London. It added 17 cents per barrel the previous session to $72.69.

The dollar declined to 109.69 yen from Friday’s 109.72. The euro advanced to $1.2111 from $1.2104.