U.S. stocks turned lower Monday as Treasury jumped, with the 30-year yield climbing over the 2% mark.
The Dow Jones Industrial Average added 14 points, or 0.04%, while the S&P 500 lost 0.1%. The tech-heavy Nasdaq Composite lost 0.3%, paring gains from earlier in the morning as U.S. Treasury yields reversed and climbed higher.
Markets continued digesting a range of economic news last week showing that inflation was rising even more than expected and workers continued to quit their jobs in search of better opportunities.
That data “added to concerns that inflation at a 30-year high could indeed remain a stickier problem and challenge for businesses, consumers and monetary policy makers to contend with over the next four to six months or even longer” John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, said in a note Monday. Several strategists, including Stoltzfus, have said they expect inflation to dampen, however.
“Positive offsets to the current waves of inflation hitting the U.S. economy at this time are likely to emerge as the effects of what may have been overstimulation of the economy at the height of the pandemic fade,” Stoltzfus said.
Tesla shares fell 4.5% Monday following a weekend Twitter exchange between CEO Elon Musk and Sen. Bernie Sanders, in which Musk suggested he’d be willing to sell even more of his shares. Musk sold nearly $7 billion worth of Tesla stock last week.
However, shares of Nasdaq member Dollar Tree jumped 13% following a report Friday that activist investor Mantle Ridge has taken a stake worth at least $1.8 billion in the discount store chain and will push it to do more to add to shareholder value.
Dow component Boeing rose 5% following news that Saudi Arabian Airlines is in talks with Airbus and Boeing for a wide-body jet order. At the same time, Emirates announced an order for two Boeing 777 Freighters at the 2021 Dubai Airshow.
Stocks are coming off a losing week after last month’s consumer price index made its largest annual increase in more than three decades. The major averages snapped a five-week winning streak.
Also, the Labor Department reported that a record 4.4 million workers left their jobs in September, generally a sign they can get something better. Consumer confidence, though, dipped to a 10-year low in November, as consumers apparently flush with cash are growing more worried about inflation.
October’s CPI jumped 6.2% from a year ago, well above the 5.9% estimate from economists polled by Dow Jones. The index, which tracks a basket of consumer products, increased 0.9% on a month-over-month basis, also hotter than expected.
Investors this week will get a look at how much consumers are spending when retail sales data drops Tuesday, while housing numbers come Wednesday with new construction starts and building permits. This also will be a busy week for the Federal Reserve, with multiple officials scheduled to speak through the week.
The Dow Jones Industrial Average dipped 0.6% and the S&P 500 eased 0.3% last week. The tech-focused Nasdaq Composite was the main underperformer, dropping 0.7% as rising bond yields dented growth pockets of the market.
Treasury yields rose, as investors bet the Federal Reserve may be forced to raise interest rates sooner than expected to combat inflation.
Still, the major averages are not far from their record highs. The Dow is 1.2% off its all-time high. The S&P 500 and Nasdaq sit 0.8% and 1.5%, respectively, away from their records.
Investors will be focused on Tuesday’s retail sales report and several major retailers’ earnings this week. Walmart and Home Depot release results on Tuesday, and Target and Lowe’s report on Wednesday.
On Monday, President Joe Biden will host a bipartisan bill signing ceremony for the Infrastructure Investment and Jobs Act.
