Stocks swayed in afternoon trading on Wall Street on Monday as the market cooled after a rare winning week.
The S&P 500 edged down 0.2% at 2:19 p.m. EST. The benchmark index oscillated between small gains and losses throughout the day. The Dow Jones Industrial Average slipped 23 points, or 0.1%, to 31,473 and the Nasdaq fell 0.5%.
A pullback in technology and communications stocks, as well as several large retailers and travel-related companies weighed on the market. Microsoft fell 1%, while Electronic Arts fell 4.6%. Amazon fell 2.4% and Carnival 1.6%.
Those losses dampened gains elsewhere in the market, including energy stocks, which rose as the price of U.S. crude oil climbed 1.9%. Exxon Mobil rose 2.5%.
European markets were mixed and Asian markets closed higher overnight. Treasury yields were mostly higher. The yield on the 10-year Treasury note, which helps fix mortgage rates, rose to 3.20% from 3.12% on Friday evening.
Stocks closed last week with solid gains and the S&P 500 had its best day in two years on Friday. It was a welcome rally amid a deep recession for Wall Street as investors worry about the path of inflation and wonder if rising interest rates will soften the impact on businesses and investors. consumers or push the economy into a recession.
The Federal Reserve and other central banks have aggressively raised interest rates in a sharp reversal after keeping rates ultra-low during the virus pandemic that has helped buoy the economy. It’s a delicate balance for the Fed, which hopes to calm the economy, but not to the point of contracting it. However, higher interest rates also hurt prices for investors and drove much of the year’s sell-off.
Investors have welcomed recent reports showing weak consumer sentiment and economic growth, as it raises the possibility that the Fed will relax its plan for aggressive rate hikes as economic growth slows.
Wall Street will release a few additional reports this week that may provide greater insight into inflation, economic growth, and the Fed’s way forward.
On Tuesday, the business group The Conference Board will publish its report on consumer confidence for the month of June. Spending and confidence held up well for most of the post-pandemic recovery, even when inflation rose. But record gasoline prices and stronger global pressure from inflation have eaten away at wallets and prompted many to change or cut spending.
Russia’s invasion of Ukraine in February contributed in part to the intensification of inflation compression. This drove up energy prices. US crude oil prices are up more than 40% for the year. Wheat and maize prices also jumped.
Speaking via video link with Ukrainian President Volodymyr Zelenskyy, the Group of Seven leaders were finalizing an agreement to cap Russian oil prices, raise tariffs on Russian products and impose other new sanctions.
Russia may also have defaulted on its foreign debt for the first time since the 1917 Bolshevik Revolution, further alienating the country from the global financial system amid its war in Ukraine.
Investors will get another update on U.S. economic growth on Wednesday when the Commerce Department releases a first-quarter gross domestic product report.
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