Energy, financial and industrials shares led U.S. stocks lower as the pullback centered in the technology sector widened while investors remained on edge over the threat of inflation.
The tech-heavy Nasdaq 100 erased a loss of almost 2% to finish little changed as some dip buyers emerged. The benchmark S&P 500 dropped for a second day after setting a record high on Friday. Treasury yields edged up and the dollar traded near the lowest levels of this year.
Debate rages over whether the expected jump in price pressures will be enduring enough to force the Federal Reserve into tightening policy sooner than current guidance suggests. Fed Governor Lael Brainard said policy makers must show continued patience as distortions in the post-pandemic boom sort themselves out while the economy is still far from the central bank’s objectives.
“I just think that in general there’s this thought that inflation may rear its ugly head,” said JJ Kinahan, chief market strategist at TD Ameritrade. “We see a little bit higher rates, not significantly, but a bit higher rates. And I think this struggle between value and growth also continues at the same time.”
