Wall Street stocks tumbled on Monday as shares of several 2021 highs including Tesla and Nvidia fell from their recent peaks.
The S&P 500 blue-chip index inched lower, while the tech-focused Nasdaq Composite fell 0.2 percent. Tesla fell more than 4% in afternoon New York trading, making it down a fifth from the high it hit less than two weeks ago. Elon Musk’s electric car company is still up about 40% this year.
Other major Nasdaq laggards on Monday included chipmakers Nvidia and AMD, both of which have posted strong gains this year.
Francesco Sandrini, senior multi-asset strategist at fund manager Amundi, said that while the quarterly earnings season has been strong, the stock market is likely to enter a “stagnation period.” in the coming months.
“The level of economic growth, while slow down, remains high,” he said. Meanwhile, Sandrini noted, analysts expect corporate earnings growth fall from current levels next year while markets are betting on the US Federal Reserve to raise interest rates from record lows in the summer. “So, it’s hard to see a short-term catalyst for the market to move much higher,” he added.
The government bond market traded calm on Monday, spiked in recent weeks as lingering inflation concerns and rising interest rates have dented the appeal of fixed-income securities. The yield on the benchmark 10-year Treasury note, a measure of global borrowing costs, rose 0.05 percentage points to 1.61%.
Investors also anticipate a slew of economic data and political events this week. US President Joe Biden is due to speak with Chinese leader Xi Jinping on Monday after a period of strained relations between the economic powers.
UK inflation data on Wednesday is expected to show consumer price gains hit 3.9% last month, the highest level in a decade.
The European Stoxx 600 index rose 0.3 percent, building on a record high hit last Friday after six straight weeks of gains. London’s FTSE 100 traded unchanged. Meanwhile, China’s CSI 300 index fell 0.1% and Hong Kong’s Hang Seng gained 0.2%.
The dollar index, which measures the US currency against six other currencies, rose 0.3% to its strongest level in 16 months. The British pound edged higher against the dollar at $1.34.
Brent crude, the oil benchmark, started to retrace its losses earlier in the afternoon in New York but remained 0.6% lower on the day at $81.68 a barrel.
