Stocks slumped Monday after higher yields in the bond market cranked up the pressure on Wall Street. Stocks had been up earlier in the day, rising as oil prices eased, the AP reports. But Treasury yields also spurted higher following the latest report on the US economy to blow past expectations. The report showed US shoppers increased their spending at retailers last month by much more than economists expected.
- The S&P 500 fell 61.59 points, or 1.2%, to 5,061.82.
- The Dow Jones Industrial Average slipped 248.13 points, or 0.7%. to 37,735.11.
- The Nasdaq composite dropped 290.08, or 1.8%, to 15,885.02.
Strong reports like Monday's have traders broadly forecasting just one or two cuts to rates this year, according to data from CME Group. That's down from expectations for six or more cuts at the start of this year. Real-estate investment trusts fell to some of Monday's sharpest losses in the stock market. Office owner Boston Properties fell 3.2% for one of the larger losses in the S&P 500. More influential was weakness for Big Tech stocks. Apple dropped 2.2%, Nvidia fell 2.5% and Microsoft sank 2%. They've been past beneficiaries of low interest rates and often feel pressure when yields are rising.
Helping to keep the losses in check were some financial companies, which reported encouraging profit for the start of the year. The pressure is on companies broadly to deliver fatter profits because interest rates looks so much less likely to offer support in the near term. Goldman Sachs rose 2.9% following its report. M&T Bank climbed 4.7% for one of the biggest gains in the S&P 500 after reporting profit for the first quarter that was slightly above analysts' expectations. It also said it slightly shrunk the amount of pain that it would take if the pressured commercial real-estate industry sinks sharply. Charles Schwab rose 1.7% after also edging past analysts' forecasts for its profit last quarter.
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