Stock fell on Monday as interest rates continued to climb on concerns over tighter monetary policy from the Federal Reserve that could slow economic growth.
The Dow Jones Industrial Average fell 120 points, or 0.4%, to $34,600.82, while the S&P 500 dipped 0.7%. The Nasdaq Composite fell 1.4%.
Those moves came as U.S. Treasury yields hit a new 3-year high overnight. On Sunday evening, the 10-year Treasury yield hit 2.7741%, or its highest point since early 2019. It topped 2.76% Monday morning to start the week. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Airline stocks gained after markets opened. Delta Air Lines spiked 4%. Alaska Air Group was up 2.7%, American Airlines Group jumped 2.8%, Southwest Airlines ticked upward 2.6% and United Airlines Holdings jumped 2.6%.
Twitter’s stock price tumbled during premarket trading on Monday after CEO Parag Agrawal revealed that Elon Musk abandoned his plan to join the company’s board. Shares for the social media company dropped more than 8% before recovering some losses. Twitter shares are down 1% after markets opened.
The fight against inflation is likely to be a market driver this week. Investors will get a look at fresh data, with the consumer price index for March due out on Tuesday and the producer price index following on Wednesday.
Cleveland Fed President Loretta Mester told CBS’ “Face the Nation” on Sunday that she still believes the Fed can get inflation under control without causing major damage to the economy.
“If you look at the risks, given what’s happening in the world and in the economy, there is an increased risk [of recession],” she said. “But I remain optimistic, and certainly my modal forecast on what is going to happen this year is that the expansion will continue.”
Mester added that the Covid lockdowns in China will “exacerbate” the supply chain issues that are contributing to inflation in the U.S.
Later this week, the first-quarter earnings season will hit its stride with some major banks and airlines reporting earnings. On Wednesday, JPMorgan and Delta Air Lines will report their earnings before the bell. On Thursday, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo are expected to report before markets open.
Investors will also be keeping an eye on developments in Ukraine. Russia’s invasion of the country has caused volatility in oil and other commodities markets, which has, in turn, disturbed stocks.
Oil prices declined on Monday. The price for West Texas Intermediate crude dropped 3.9% to $94.42 per barrel. The price for Brent crude dropped 3.7%, to trade at $99.01.
Wall Street is coming off a negative week, with the tech sector being a source of concern. The tech-heavy Nasdaq Composite fell 3.9% last week, while the S&P 500 and Dow dropped 1.3% and 0.3%, respectively.
The health-care sector was a bright spot, gaining more than 3%.
Correction: A previous version of this story misspelled Mester’s last name.
