Stocks sway on Wall Street, cool off after winning week

Stocks swayed in afternoon trading on Wall Street Monday as the market cools off following a rare winning week.

The S&P 500 edged down 0.2% as of 2:19 p.m. Eastern. The benchmark index has been shifting between small gains and losses throughout the day. The Dow Jones Industrial Average slipped 23 points, or 0.1%, to 31,473 and the Nasdaq fell 0.5%.

A pullback in technology and communication stocks, and in several big retailers and travel-related companies weighed on the market. Microsoft fell 1%, while Electronic Arts slid 4.6%. Amazon slipped 2.4% and Carnival fell 1.6%.

Those losses checked gains elsewhere in the market, including energy stocks, which rose as the price of U.S. crude oil climbed 1.9%. Exxon Mobil rose 2.5%.

European markets were mixed and Asian markets closed higher overnight. Treasury yields were mostly higher. The yield on the 10-year Treasury note, which helps set mortgage rates, rose to 3.20% from 3.12% late Friday.

Stocks closed out last week with solid gains and the S&P 500 had its best day in two years on Friday. It was a welcome rally in the midst of a deep slump for Wall Street as investors worry about the path of inflation and whether rising interest rates will temper the impact to businesses and consumers or push the economy into a recession.

The Federal Reserve and other central banks have been aggressively raising interest rates in a sharp turnaround from maintaining ultra-low rates during the virus pandemic that helped support the economy. It’s a delicate balance for the Fed, which hopes to cool off the economy, but not so much that it actually contracts. Higher interest rates, though, also hurt prices for investors and have prompted much of the year’s sell-off.

Investors have favorably viewed recent reports showing weak consumer sentiment and economic growth because that raises the possibility that the Fed will ease off its plan for aggressive rate hikes as economic growth slows.

Wall Street will have a few more reports this week that could provide more insight into inflation, economic growth and the Fed’s path ahead.

On Tuesday, business group The Conference Board will release its consumer confidence report for June. Spending and confidence held up well through most of the post-pandemic recovery, even as inflation rose. But record high gas prices and an overall tighter squeeze from inflation have been eating away at wallets and prompting many to shift or cut back spending.

Part of push behind inflation’s tighter squeeze was Russia’s invasion of Ukraine in February. That sent energy prices soaring. U.S. crude oil prices are up more than 40% for the year. Prices for wheat and corn have also surged.

Conferring by video link with Ukrainian President Volodymyr Zelenskyy, Group of Seven leaders were finalizing a deal to seek a price cap on Russian oil, raise tariffs on Russian goods and impose other new sanctions.

Russia may have also defaulted on its foreign debt for the first time since the 1917 Bolshevik Revolution, further alienating the country from the global financial system amid its war in Ukraine.

Investors will get another update on U.S. economic growth on Wednesday when the Commerce Department releases a report on first-quarter gross domestic product.