(Bloomberg) — Technology companies dragged down stocks, overshadowing optimism with a report suggesting prospects for cooler inflation. Traders also sifted through data showing mortgage rates in the U.S. hit a two-year high. The dollar fell.
The Nasdaq 100 underperformed major benchmarks, with megacaps like Tesla Inc. and Microsoft Corp. dropping. Chipmakers erased gains that were earlier driven by Taiwan Semiconductor Manufacturing Co.’s stronger growth projections. Boeing Co. drove the Dow Jones Industrial Average higher after a Bloomberg News report said the 737 Max is poised to resume commercial flights in China as soon as this month.
In a confirmation hearing before the Senate Banking Committee, Federal Reserve Governor Lael Brainard said she has confidence that policy actions will reduce inflation. Prices paid to U.S. producers decelerated in December as two key drivers of inflation in 2021 — food and energy — declined from a month earlier, representing a respite in the recent trend of sizable increases.
“Investors are looking for signs of moderation in supply-chain disruptions as declining input costs would ultimately signal an easing of the consumer’s price burdens,” said John Lynch, chief investment officer for Comerica Wealth Management. “This could help clarify the extent of the Fed’s mission to raise rates in 2022 and beyond.”
Read: U.S. Initial Jobless Claims Rose to Highest Since Mid-November
Morgan Stanley clients expect financial stocks to outperform this year, according to a survey at its annual conference this week. The poll shows that 45% of respondents bet the industry will be the best performer in 2022. That’s the highest share of the votes for the sector since 2015, the firm said in a note Thursday.
Here are some key events this week:
- Bank of Korea policy decision and briefing on Friday.
- Wells Fargo, Citigroup, JPMorgan due to report earnings on Friday.
- U.S. business inventories, industrial production, University of Michigan consumer sentiment, retail sales on Friday.
- New York Fed President John Williams speaks Friday.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.3% as of 10:57 a.m. New York time
- The Nasdaq 100 fell 0.9%
- The Dow Jones Industrial Average rose 0.3%
- The Stoxx Europe 600 fell 0.3%
- The MSCI World index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.1% to $1.1459
- The British pound rose 0.2% to $1.3733
- The Japanese yen rose 0.5% to 114.12 per dollar
Bonds
- The yield on 10-year Treasuries declined one basis point to 1.73%
- Germany’s 10-year yield declined three basis points to -0.09%
- Britain’s 10-year yield declined three basis points to 1.11%
Commodities
- West Texas Intermediate crude fell 0.7% to $82.03 a barrel
- Gold futures fell 0.7% to $1,814.60 an ounce
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