“So, it really wasn’t surprising for us to see a bounce last week.” On the other hand, Hainlin said, “we would view that as not necessarily an indication that fundamentally things have gotten better.”
The S&P 500 fell 11.63 points to 3,900.11. The Dow dropped 62.42 points to 31,438.26, and the Nasdaq slid 83.07 points to 11,524.55.
Smaller company stocks bucked the broader market’s decline. The Russell 2000 rose 6.01 points, or 0.3 per cent, to 1,771.74.
European markets also ended mixed. Asian markets closed higher overnight.
Technology and communication stocks were among the biggest drag on the market. Microsoft fell 1 per cent, while Electronic Arts slid 3.5 per cent.
Several big retailers and travel-related companies also fell. Amazon and Carnival each fell 2.085 per cent.
Those losses checked gains elsewhere in the market, including energy stocks, which rose as the price of US crude oil climbed 1.8 per cent. Exxon Mobil rose 2.5 per cent.
Robinhood Markets jumped 14 per cent following a published report suggesting that cryptocurrency exchange FTX is considering buying the popular trading app company. In May, FTX CEO Samuel Bankman-Fried bought a 7.6 per cent stake in Robinhood, according to a filing with US regulators.
Robinhood shot to fame for its easy-to-use trading app, which brought a new generation of investors to the stock market, perhaps most famously with the meme-stock frenzy that sent GameStop soaring early last year. Crypto has become a major part of its business.
Treasury yields rose. The yield on the 10-year Treasury note, which helps set mortgage rates, rose to 3.20 per cent from 3.12 per cent late Friday.
The market rally last week was welcome relief in the midst of a deep slump for Wall Street as investors worry about the path of inflation and whether rising interest rates will temper the impact to businesses and consumers or push the economy into a recession.
The Federal Reserve and other central banks have been aggressively raising interest rates in a sharp turnaround from maintaining ultra-low rates during the virus pandemic that helped support the economy. It’s a delicate balance for the Fed, which hopes to cool off the economy, but not so much that it actually contracts. Higher interest rates, though, also hurt prices for investors and have prompted much of the year’s sell-off.
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Investors have favourably viewed recent reports showing weak consumer sentiment and economic growth because that raises the possibility that the Fed will ease off its plan for aggressive rate hikes as economic growth slows.
Wall Street will have a few more reports this week that could provide more insight into inflation, economic growth and the Fed’s path ahead.
On Tuesday, business group The Conference Board will release its consumer confidence report for June. Spending and confidence held up well through most of the post-pandemic recovery, even as inflation rose. But record high gas prices and an overall tighter squeeze from inflation have been eating away at wallets and prompting many to shift or cut back spending.
Part of push behind inflation’s tighter squeeze was Russia’s invasion of Ukraine in February. That sent energy prices soaring. US crude oil prices are up more than 40 per cent for the year. Prices for wheat and corn have also surged.
Conferring by video link with Ukrainian President Volodymyr Zelenskyy, Group of Seven leaders were finalising a deal to seek a price cap on Russian oil, raise tariffs on Russian goods and impose other new sanctions.
Russia may have also defaulted on its foreign debt for the first time since the 1917 Bolshevik Revolution, further alienating the country from the global financial system.
Investors will get another update on US economic growth on Wednesday when the Commerce Department releases a report on first-quarter gross domestic product.
