U.S. Stocks Fall Further From Records Amid Inflation Fears

FILE - The New York Stock Exchange is seen in New York, Monday, Nov. 23, 2020. Stocks are off to a mostly lower start on Wall Street as the market comes off its worst weekly decline since February. The S&P 500 was off 0.1% in the early going Monday, May 17, 2021. (AP Photo/Seth Wenig, File)

Stocks fell in afternoon trading on Wall Street Monday as the market comes off of its worst weekly decline since February.

Big Tech stocks were the heaviest weights pulling the major indexes lower. The sector has been responsible for big swings in either direction over the last few weeks as investors weigh the impact of rising inflation and a broad economic recovery. Energy and materials companies did better than the rest of the market.

The S&P 500 index fell 0.6% as of 1:17 p.m. Eastern. The Dow Jones Industrial Average fell 125 points, or 0.4%, to 34,255 and the Nasdaq fell 1.1%.

Apple fell 1.6% and Microsoft fell 1.7%, while several chipmakers also slipped.

AT&T was relatively unchanged after giving back an earlier gain, while Discovery fell 4.2% after the companies announced a $43 billion deal that will combine several major media and streaming entertainment businesses. The new company combines AT&T’s CNN and HBO channels with Discovery’s Food Network and HGTV.

Steelmakers got a boost from the suspension of key measures in a tariff dispute between the U.S. and European Union. Nucor rose 1.9% and United States Steel rose 1%.

Crude oil prides rose and helped lift several energy companies. Exxon Mobil rose 1.2%.

Investors are still carefully watching for signs of inflation rising too quickly as the economy recovers from the pandemic. Concerns over inflation, some of which is expected, have made for choppy trading. The pace and breadth of the recovery is also being monitored as more people in the U.S. get vaccinated, but COVID-19 still poses a threat.

The cautious approach follows several months of solid gains for the major indexes. Expectations for strong corporate earnings, which have mostly been fulfilled, also helped fuel much of the rally earlier in the year.

“History says whenever we’ve had such a strong start to the year we tend to take a break and digest some of those gains,” said Sam Stovall, chief investment strategist at CFRA. “In many ways this is fairly natural.”

Bond yields were steady. The yield on the 10-year Treasury remained at 1.63%, little changed from late Friday.

European markets were mostly lower and Asian markets ended mixed.

- May 17. 2021 - 4:09 AM ET



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