NEW YORK (AP) — Stocks fell Monday morning on Wall Street as markets turned cautious ahead of earnings reports from big U.S. corporations and updates on the severity of inflation hitting businesses and consumers. American households.
The S&P 500 fell 1.3% at 10:21 a.m. Eastern. The Dow Jones Industrial Average fell 203 points, or 0.7%, to 31,134 and the Nasdaq fell 2.2%.
Twitter fell 6.7% after Elon Musk announced Friday night that he would drop his $44 billion bid to buy the social media company, while Twitter said it would sue the billionaire to enforce his purchase commitment.
European markets fell as closure of a major gas pipeline from Russia to Germany for annual maintenance has raised fears that Russia will not resume gas flow as planned.
The first drop in major indexes follows a week of gains in what has been a turbulent market for months. Overall, stocks are in freefall as investors try to track the impact of inflation on businesses and consumers and worry about a possible recession.
Wall Street will receive key inflation updates this week. The US government will release its June report on the impact of inflation on consumer prices on Wednesday and a report Thursday on the impact on prices for businesses.
The latest round of corporate earnings is accelerating this week, with Delta Air Lines releasing its latest results on Wednesday. JPMorgan Chase will report results on Thursday, while Citigroup and Wells Fargo will report on Friday.
The Federal Reserve aggressively raised interest rates in an attempt to slow economic growth and calm inflation. Wall Street’s main concern is whether the central bank is dampening economic growth too hard and dragging the economy into a recession. Those concerns have deepened as economic indicators point to an already slowing economy.
Inflation has only been worsened in 2022 by The Russian invasion of Ukraine pushing up energy prices. COVID-19 remains a concern and has caused lockdowns in China that have hurt supply chains. The rapidly evolving coronavirus has spawned yet another super contagious omicron mutant it worries scientists as it gains traction in India and appears in many other countries including the United States, Australia, Germany, United Kingdom and Canada.
Companies considered less risky investments, such as utilities and home goods manufacturers, held up better than the market as a whole.
Technology stocks were among the largest weightings in the market. Apple fell 1.8% and parent company Google lost 2.5%. Retailers and other businesses that depend on direct consumer spending also fell sharply. Amazon fell 3.2% and Expedia 3.3%.
Bond yields fell. The 10-year Treasury yield fell to 2.98% from 3.09% on Friday evening.
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