(Bloomberg) -- U.S. equities snapped a two-day rally as investors weighed risks to the outlook including inflation and a spike in Covid-19 cases in parts of the world.
Technology, industrials and financials led the benchmark S&P 500 lower. Apple, Microsoft and Tesla weighed on the Nasdaq 100. Discovery Inc. shares jumped on a deal with AT&T Inc. to merge media assets. Coinbase Global Inc. fell as much as 7.8% to $238.25, a record low and below the reference price used in its April direct listing. The Stoxx Europe 600 Index was in the green and stocks in Asia were mixed.
“The U.S. economy and stocks continue to show remarkable resilience in the face of challenges that are typical of an exit from a major crisis,” John Stoltzfus, chief investment strategist at Oppenheimer, wrote to clients. “Near term, markets may find themselves with ‘no particular place to go’ until Q2 earnings season provides clarity on corporate results and guidance.”
The dollar was little changed while gold climbed to the highest in more than three months. Bitcoin steadied after Elon Musk said Tesla Inc. hasn’t sold from its holdings of the token. The largest cryptocurrency had dropped as low as $42,185, the least since February.
Concerns that policy makers may have to pull back support sooner than expected to quell rising inflation have weighed on global equities. Investors this week will parse the minutes from the Federal Open Market Committee’s latest meeting for any discussion about accelerating price pressures, and hints of a timeline for reducing asset purchases. Fed Vice Chair Richard Clarida and Atlanta Fed President Raphael Bostic are also due to speak this week.
“Expect this volatility to continue as the market searches for direction,” said Mike Loukas, chief executive officer at TrueMark Investments. “The release of the Fed minutes on Wednesday will be interesting. With earnings season almost over, inflation will continue to hold center stage.”
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Here are some key events this week:
- Reserve Bank of Australia publishes minutes of its latest meeting Tuesday
- Fed Vice Chair Richard Clarida and Atlanta Fed President Raphael Bostic are among policy makers speaking this week
- The Fed publishes minutes from its April meeting Wednesday, which may provide clues to officials' views on the recovery and how they define "transitory" when it comes to inflation
These are some of the main moves in markets:
Stocks
- The S&P 500 fell 0.5% as of 10:11 a.m. New York time
- The Nasdaq 100 fell 1%
- The Dow Jones Industrial Average fell 0.5%
- The Stoxx Europe 600 was little changed
- The MSCI World index fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.2140
- The British pound was little changed at $1.4093
- The Japanese yen rose 0.1% to 109.23 per dollar
Bonds
- The yield on 10-year Treasuries advanced one basis point to 1.64%
- Germany's 10-year yield advanced two basis points to the highest in about two years
- Britain's 10-year yield advanced two basis points to 0.87%
Commodities
- West Texas Intermediate crude rose 0.6% to $66 a barrel
- Gold futures rose 0.9% to the highest since Feb. 10
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