S&P edges down after last week’s rally with inflation in focus

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, USA, March 21, 2022. REUTERS / Brendan McDermid / File Photo

May 31 (Reuters) – The S&P 500 fell slightly on Tuesday after a three-session rally as volatile oil price trading continued to boost inflation and investors reacted to hawkish comments from a Federal Reserve official.

Eight of the 11 major S&P 500 (.SPX) sectors were in decline, and after performing better earlier in the session, energy (.SPNY) lost ground and was last down 0.8% in late afternoon trading when oil prices rose. negative.

This was after a report that some OPEC members were investigating the idea of ​​suspending Russia’s participation in an oil production agreement, which potentially paved the way for other producers to pump significantly more crude oil.

Healthcare (.SPXHC) and real estate (.SPLRCR) were the biggest laggards for the session so far.

Fed Governor Christopher Waller said on Monday that the US Federal Reserve should be prepared to raise interest rates by half a percentage point at each meeting from now until inflation is crucial. read more

Waller’s comments triggered a sell-off in the bond markets, with the benchmark index for 10-year US government bonds climbing to a week-high as traders lowered expectations that the Fed could catch its breath after the gains in June and July.

“There are too many concerns at the moment for the markets to get a sharp V-bottom,” said Carol Schleif, deputy chief investment officer at the BMO Family Office, referring to uncertainty surrounding the war between Russia and Ukraine, the global economy and inflation. as well as the Fed’s policy.

“Part of that is energy prices, because in the margins they really affect people’s propensity to spend money. People really notice the higher prices in the grocery store.”

Investors did not worry so much about Tuesday’s meeting between US President Joe Biden and Fed Chairman Jerome Powell, according to Schleif, who saw that Bidens urged the Fed to stay focused on inflation as “a message to markets that fighting inflation has moved to the highest priority. of the Fed’s dual mandates versus getting full employment. “

At 14:40 ET (1840 GMT), the Dow Jones Industrial Average (.DJI) fell 47.54 points, or 0.14%, to 33,165.42, the S&P 500 (.SPX) lost 0.89 points, or 0, 02%, to 4,157. The Nasdaq Composite (.IXIC) added 20.74 points, or 0.17%, to 12,151.87.

All three indices had gathered last week to have a decade-long losing streak.

Reinforced by last week’s rally, the S&P 500 was up 0.5% for the month of May, while the Dow was up 0.4% for the month. The technology-heavy Nasdaq was set at a decline of 1.7% for the month.

Data showed that US consumer confidence declined modestly in May, amid persistently high inflation and rising rates, while a separate reading showed that house price growth in the US unexpectedly warmed to record levels in March. read more

Other key data coming this week are non-farm wage figures for labor market signals.

US-listed shares in Yamana Gold Inc climbed after South African miner Gold Fields Ltd (GFIJ.J) agreed to buy the Canadian miner in a $ 6.7 billion deal. read more

Dexcom Inc (DXCM.O) jumped after the glucose monitoring system maker denied a report of merger talks with insulin pump maker Insulet Corp (PODD.O).

The CBOE Volatility Index (.VIX) took a three-day decline and was last up 37 points.

Falling issues were more than advancing on the NYSE with a ratio of 1.66 to 1; on the Nasdaq favored a ratio of 1.30 to 1 declines.

The S&P 500 posted four new 52-week highs and 29 new lows; The Nasdaq Composite recorded 46 new highs and 41 new lows.

Reporting by Sinéad Carew, Anisha Sircar, Devik Jain and Sruthi Shankar in Bengaluru; Editing by Marguerita Choy

Our standards: Thomson Reuters Trust Principles.