NEW YORK (AP) — Stocks fell during midday trading on Wall Street on Monday, exacerbating losses in the market on concerns about inflation and the path ahead for the economy.
The S&P 500 fell 1.7% as of 12:11 pm Eastern and more than 90% of stocks in the benchmark index took losses. It finished in the red last week, breaking a four-week winning streak.
The Dow Jones Industrial Average fell 481 points, or 1.4%, to 33,226 and the Nasdaq fell 2.1%.
Technology companies and retailers had some of the heaviest losses. Microsoft fell 2.5% and Target 2.1%.
Movie theater operators were volatile following a report that Cineworld is considering filing for Chapter 11 bankruptcy protection. The industry is still struggling to recover from the virus pandemic. AMC Entertainment was up 2.3% after recovering from an earlier plunge in trading. Cinemark was down 3.1%.
Bright spots in the market included Signify Health, which rose 32.1% after The Wall Street Journal reported that Amazon would bid on the company.
Bond yields gained ground. The 10-year Treasury yield rose to 3.01% from 2.97% at the end of Friday.
The broader market’s losses follow a weeklong rally. Investors are trying to figure out where the economy is headed as persistently high inflation hurts businesses and consumers. Record high inflation is also making investors focus on central banks and their efforts to fight high prices without further hurting economic growth.
“You’ve had quite the rally and there is reason to be unsure where we are going,” said Tom Martin, senior portfolio manager at Globalt Investments. “There’s still quite a bit of potential for a recession.”
Last week’s minutes from the Federal Reserve’s July board meeting confirmed plans for more rate hikes, despite signs of weaker economic activity. Traders fear that aggressive moves to slow the economy will go too far and trigger a recession. The U.S. economy has already shrunk in the first half of 2022, and Wall Street will get more information on Thursday when the government releases an updated report on the U.S. economy for the second quarter.
Investors are also looking forward to this week’s Federal Reserve conference for signs of more potential rate hikes in the US to cool rising inflation. The central bank will hold its annual meeting in Jackson Hole, Wyoming on Thursday. Fed Chair Jerome Powell will deliver a speech Friday morning.
The Fed is meeting after a tough week of corporate and economic data showing that inflation is still putting pressure on the economy, but consumer spending remains resilient. Falling gasoline and food prices for wheat and corn have helped ease some of that pressure. That essentially helped to halt the inflation rally in July, although prices still remain stubbornly high.
“I don’t think we’re out of the loop with inflation yet,” Martin said. “We still don’t really know how inflation will play out and what the Fed will do.”