Wall Street’s main indexes fell after opening higher on Monday, as a rally last week on easing concerns over inflation lost steam, with high-growth stocks leading declines.
“We had a nice rally last week, so I think we’re seeing a little bit of profit taking this morning,” said Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas.
“The stocks that were up the most last week are the ones getting hit the hardest here today.”
The tech-heavy Nasdaq Composite index, which gained 7.5% last week, fell 0.7% to lead declines among the three major indexes.
Investors were betting on the retreat in oil prices from the three-month highs hit in June to potentially ease inflationary pressures and likely push the Federal Reserve to moderate its aggressive policy tightening.
However, data on Monday showed new orders for U.S.-made capital goods and shipments increased solidly in May, pointing to sustained strength in business spending on equipment in the second quarter.
Oil prices also moved back into positive territory, pushing up the S&P 500 energy index by 2.2%, reining in expectations for inflation falling on the back of lower energy prices.
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The U.S. central bank has rapidly raised interest rates to tame 40-year-high inflation, stoking fears its actions could tip the world’s largest economy into a recession.
After the benchmark S&P 500 index earlier this month recorded a 20% drop from its January closing peak to confirm a bear market, investors have been trying to gauge when the market might hit its bottom.
At 10:11 a.m. ET the Dow Jones Industrial Average was down 76.62 points, or 0.24%, at 31,424.06, the S&P 500 was down 13.94 points, or 0.36%, at 3,897.80 and the Nasdaq Composite was down 78.44 points, or 0.68%, at 11,529.19.
Shares of Robinhood Markets rose 0.6% after media reports said Goldman Sachs upgraded the retail broker’s stock to “neutral” from “sell”.
Goldman Sachs, however, cut rating on Coinbase Global Inc to “sell” from “buy”, according to media reports, sending shares of the cryptocurrency exchange lower by 9.4%.
Declining issues outnumbered advancers for a 1.03-to-1 ratio on the NYSE and a 1.31-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 16 new highs and 41 new lows.
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