The stock market traded lower Monday after last week's thrashing as U.S. Treasury yields and the U.S. dollar skyrocketed. Amazon.com and casino stocks led gains.
The Nasdaq composite traded 0.1% lower and the S&P 500 fell 0.6%, while the Dow Jones Industrial Average fell 0.7%. The small-cap Russell 2000 index fell 1.3%.
Volume dropped on the Nasdaq and the NYSE vs. the same time on Friday.
The Dow Jones industrials fell 4% last week The Nasdaq has now fallen in five of the past six weeks and is down more than 30% this year. The S&P 500 declined 4.6% last week to its lowest level since December of 2020.
The yield on the 10-year U.S. Treasury note soared 0.17% to 3.86% Monday morning. U.S. dollar futures also rose, with the U.S. Dollar Index strengthening to 114.06 as currencies in Europe fell.
"Markets here and abroad are being whipsawed by tough-talking central bankers as they continue assertive monetary policy to bring inflation under control," said Quincy Krosby, chief global strategist for LPL Financial. "Markets are feeling the pain. Increasingly, market psychology has transitioned from concerns over inflation to worries that, at a minimum, corporate profits will decline as economic growth slows demand."
Stock Market Mixed As London Struggles
U.S. crude oil fell 1% to $77.95 per barrel, its lowest level since January.
The S&P Real Estate Select Sector ETF fell 2.4% and was the worst-performing sector of the 11 S&P sectors. The housing crunch continued as mortgage rates rose.
European markets traded lower Monday. The London FTSE 100 fell 0.2%, while the German DAX and the French CAC 40 also traded lower.
U.K. financial markets fell after England announced on Friday its largest tax cuts in decades, which investors believe could send inflation higher and put the British pound in risk. The British pound briefly sank to its lowest level ever against the U.S. dollar Monday, before paring losses.
Meanwhile, Russian stocks tumbled to their lowest level since 2017 after the U.S. warned Russia of "catastrophic consequences" if Russia uses nuclear weapons against Ukraine.
In Asia, Japan's Nikkei 225 dropped 2.7%, the Hang Seng lost 0.4% and the Shanghai index fell 1.2%.
Amazon, Casino Stocks Boost U.S. Stock Market
Casino stocks spiked early Monday as Macau city officials signaled that China is set to ease Covid travel restrictions, making it much easier for people to return to the globe's largest gambling hub.
This sent casino stocks with Macau exposure rocketing in Monday's market trading. Wynn Resorts was up 13% and Las Vegas Sands rose nearly 13%. Melco Resorts & Entertainment skyrocketed 31%.
MGM Resorts International, which has less exposure to Macau than its competitors, rose 2.6%.
Among major stocks, online retailer Amazon.com gained 1.7% Monday, and electric-vehicle leader Tesla traded 1.2% higher. Among the Dow Jones industrials, Apple climbed 0.8% and Microsoft gained 0.5%.
Chinese electric-vehicle maker Li Auto jumped 6% despite the company slashing its third-quarter delivery outlook due to supply-chain issues. Li stock is poking above a downward trendline from its July high. Ride-hailing firm Lyft dropped 1.8% after UBS downgraded the stock from buy to neutral.
Antitrust Trial Against American Airlines, JetBlue To Begin
American Airlines and JetBlue Airways will defend their partnership in an antitrust trial starting this week against government allegations that they are squelching competition in New York and Boston and harming consumers throughout the country.
The Justice Department and six states and the District of Columbia filed an antitrust lawsuit last year to block a 2020 agreement between the two airlines. The agreement called for both airlines to sell seats on one another's flights along certain routes and share revenue from flights. American and JetBlue have said that working together would make them more viable challengers at the three New York-area airports and in Boston.
AAL stock fell 0.9% Monday while JBLU was down 2.2% after being up earlier in the day.
The Innovator IBD 50 ETF traded down 0.1% after falling more than 5% on Friday, undercutting its March 2020 lows.
Follow Michael Molinski on Twitter @IMmolinski
