Nine of the 11 major S&P sectors declined, with technology shedding about 1%. Apple Inc and Microsoft Corp weighing the most on the benchmark S&P 500 and the Nasdaq.
The S&P 500 saw its biggest one-day jump in more than a month on Friday as investors picked up beaten-down stocks following a pullback earlier in the week on concerns around inflation and a sooner-than-expected tightening by the U.S. Federal Reserve.
In a relatively quiet week for economic data, minutes on Wednesday from the Fed’s policy meeting last month could shed more light on the policymakers’ outlook of an economic rebound.
“The volatility has picked up because a lot of the good news has been priced in, and last week we finally saw fears of inflation,” said Greg Marcus, managing director, UBS Private Wealth Management.
The Russell 1000 value index, which includes energy and bank stocks, continued to outperform on Monday, taking its year-to-date gains to 17%, versus its tech-laden growth counterpart’s rise of about 4%.
“I certainly wouldn’t want to be putting new money towards (tech). The best hedges (against inflation) you can have are cyclical companies such as materials and industrials, and financials,” Marcus added.
At 9:10 p.m. IST, the Dow Jones Industrial Average was down 171.67 points, or 0.50%, at 34,210.30, the S&P 500 was down 21.19 points, or 0.51%, at 4,152.58, and the Nasdaq Composite was down 97.45 points, or 0.73%, at 13,332.55.
Earnings this week will be scrutinized for clues on whether rising prices had any impact on consumer demand and if retailers could sustain their strong earnings momentum.
Walmart Inc, home improvement chain Home Depot Inc and department store operator Macy’s are set to report on Tuesday, with Target Corp Ralph Lauren and TJX Cos on tap later in the week.
With the earnings season at its tail-end, overall earnings for S&P 500 companies are expected to have climbed 50.6% from a year ago, according to Refinitiv IBES, the strongest pace of growth in 11 years.
AT&T, owner of HBO and Warner Bros studios, and Discovery, home to lifestyle TV networks such as HGTV and TLC, said on Monday they will combine their content assets to create a standalone global entertainment and media business. AT&T shares gained 1.5%, while Discovery fell about 3%.
Cryptocurrency-related stocks like Marathon Digital , Riot Blockchain and Coinbase fell between 6% and 9% as bitcoin swung in volatile trading after Tesla boss Elon Musk’s tweets about the carmaker’s bitcoin holdings.
Declining issues outnumbered advancers for a 1.18-to-1 ratio on the NYSE and for a 1.19-to-1 ratio on the Nasdaq.
The S&P index recorded 28 new 52-week highs and no new low, while the Nasdaq recorded 75 new highs and 30 new lows.
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