The SP 500 and the Dow Jones indexes retreated from record levels on Monday, as investors geared up for the start of the corporate reporting season and a key inflation report later this week.
A pullback in the benchmark 10year bond yield from 14month highs in April eased worries about higher borrowing costs, helping richly valued technology stocks gain ground and drive the SP 500 and the Dow to record levels.
Even with stocks at record highs, we expect further upside thanks to supportive fiscal and monetary policy, improving economic data and faster COVID19 vaccination rates, said Tom Mantione, managing director, UBS Private Wealth Management in Connecticut.
The SP 500 technology sector fell the most among the 11 major SP 500 sectors, while energy stocks rose 0.9 on the back of higher oil prices.
U.S. consumer price data for March and 271 billion of U.S. Treasury auction this week could end a recent lull in the bond market, reigniting a rise in yields that worried investors in the first quarter.
Federal Reserve Chair Jerome Powell on Sunday said the U.S. economy is at an inflection point with expectations that growth will pick up speed in the months ahead, but also risks if a hasty reopening leads to a continued increase in coronavirus cases.
Results from big U.S. banks Goldman Sachs, JPMorgan and Wells Fargo will pour in on Wednesday, kicking off the firstquarter earnings season where investors will look for reasons to support a stock market at alltime highs.