"The market leadership is not doing all that well this year," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "There's been a general rotation away from growth to other parts of the market."
A demand resurgence is colliding with strained supply of basic materials, helping to fuel inflation worries.
"Once the supply lines are rebuilt this will go away. But it's going to take some time," Nolte added. "It's different from flipping on a light switch."
The break-even rate on five-year and 10-year U.S. Treasury Inflation-Protected Securities (TIPS) touched their highest levels since 2011 and 2013, respectively.
"There's still some push and pull as to whether the market believes inflation is transitory or something that's going to stick around," Nolte said.
Inflation concerns will be in the minds of investors when the Labor Department releases its latest CPI report on Wednesday.
A shutdown to halt a ransomware attack on the Colonial Pipeline entered its fourth day, hobbling a network which transports nearly half of the East Coast's fuel supplies.
The Dow Jones Industrial Average fell 34.94 points, or 0.1%, to 34,742.82, the S&P 500 lost 44.17 points, or 1.04%, to 4,188.43 and the Nasdaq Composite dropped 350.38 points, or 2.55%, to 13,401.86.
Of the 11 major sectors in the S&P 500, six closed red. Tech was the biggest loser, sliding 2.5%.
First-quarter reporting season has entered the home stretch, with 439 of the companies in the S&P 500 having reported as of Friday. Of those, 87% have beaten consensus expectations, according to Refinitiv IBES.
Analysts now see year-on-year S&P earnings growth of 50.4% on aggregate, more than double the rate forecast at the beginning of April and significantly better than the 16% first-quarter growth expected on January 1, per Refinitiv
Hotel operator Marriott International Inc missed quarterly profit and revenue expectations due to weak U.S. bookings which offset a rebound in China. Its shares fell 4.1%.
After the bell, its rival Wynn Resorts Ltd missed quarterly earnings and revenue estimates. Its shares were up in after-hours trading.
Electric vehicle stocks put on the brakes, with Tesla Inc down 6.4% and Fisker off 9.0% after Workhorse Group missed quarterly revenue expectations. Workhorse lost 14.9% on the day.
FireEye rose 1.2% after industry sources identified the cybersecurity firm as among those helping Colonial Pipeline recover from the recent cyberattack.
Declining issues outnumbered advancing ones on the NYSE by a 1.88-to-1 ratio; on Nasdaq, a 3.24-to-1 ratio favored decliners.
The S&P 500 posted 223 new 52-week highs and no new lows; the Nasdaq Composite recorded 208 new highs and 148 new lows.
Volume on U.S. exchanges was 10.97 billion shares, compared with the 10.20 billion average over the last 20 trading days.
(Reporting by Stephen Culp; Additional reporting by Medha Singh and Sruthi Shankar in Bangalore; Editing by Lisa Shumaker)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.