Wall Street got back to slumping on Monday to kick off a week full of updates about how bad inflation is and how corporate profits are handling it.
The S&P 500 fell 1.2 per cent and gave up the majority of its gains from the prior week. The Dow Jones Industrial Average slipped 0.5 per cent, and the Nasdaq composite dropped 2.3 per cent.
Stocks of smaller companies were some of the biggest losers; the Russell 2000 index was down 2.1 per cent, as worries about a possible recession continue to dog markets. The highest inflation in four decades is pushing the US Federal Reserve to hike interest rates, which puts the clamps on the economy and pushes downward on all kinds of investments.
Parts of the economy are slowing already, though the still-hot jobs market remains a notable exception.
COVID also continues to drag on the global economy. An outbreak of infections is forcing casinos in the Asian gambling centre of Macao to shut for at least a week. That sent Wynn Resorts and Las Vegas Sands down more than 6 per cent apiece for some of the larger losses in the S&P 500.
Twitter lost even more, 11.3 per cent, in the first trading after billionaire Elon Musk said he wants out of his deal to buy the social media platform for $US44 billion ($65b). Twitter said it will take Musk to court to uphold the agreement.
Other big technology companies were also particularly weak. It’s a continuation of this year’s trend, where rising rates most hurt the investments that soared highest earlier in the pandemic.
The struggles pulled the Nasdaq down 262.71 points to close at 11,372.60. The S&P 500 dropped 44.95 to 3854.43, and the Dow dipped 164.31 to 31,173.84.
