Stocks on Wall Street ended a choppy trading session little-changed on Monday, with several of the year’s high-flying stocks including Tesla and Nvidia sliding in value.
The blue-chip S&P 500 share index struggled to find its footing, dipping down into negative territory for much of the day before a late jump left it flat for the day. The technology-focused Nasdaq Composite also rebounded from earlier losses of as much as 0.5 per cent to end the day down less than 0.1 per cent. It was only the third day in the past 16 trading sessions that the Nasdaq Composite has not posted a gain.
Tesla had fallen more than 5 per cent in morning trading, after the company’s founder Elon Musk sparred with senator Bernie Sanders over taxing billionaires, with Musk suggesting he could sell more Tesla stock. Tesla rebounded, but still ended the day 1.9 per cent lower, down 19 per cent from a high it hit less than two weeks ago. The stock is still up roughly 40 per cent for the year.
Other big Nasdaq laggards early on Monday included chipmakers Nvidia and AMD, both of which have also posted robust gains this year and both of which pared losses in afternoon trading. Nvidia was 1.2 per cent lower on the day, while AMD gave up 1 per cent.
Francesco Sandrini, senior multi-asset strategist at fund manager Amundi, said although quarterly earnings season had been strong, stock markets were likely to enter “a period of inertia” in coming months.
“The level of economic growth, while slowing down, remains elevated,” he said. But, Sandrini noted that analysts expected corporate earnings growth to fall from current levels next year while markets are betting on the US Federal Reserve raising interest rates from their record low by the summer. “So it is also hard see a short-term catalyst for markets to move much higher,” he added.
Government bond markets traded calmly on Monday, having whipsawed in recent weeks as concerns about prolonged inflation and interest rate rises reduced the appeal of fixed income-paying securities. The yield on the benchmark 10-year Treasury note, a yardstick for global borrowing costs, rose 0.05 percentage points to 1.62 per cent.
Investors were also anticipating a batch of economic data and political events this week. US president Joe Biden was due to speak to Chinese leader Xi Jinping on Monday following a period of tense relations between the economic powers.
UK inflation data on Wednesday are expected to show consumer price increases hit 3.9 per cent last month, their highest level in a decade.
The European Stoxx 600 index rose 0.3 per cent, building on a record high reached last Friday after six consecutive weeks of gains. London’s FTSE 100 traded flat. Meanwhile, China’s CSI 300 index dipped 0.1 per cent and Hong Kong’s Hang Seng rose 0.2 per cent.
The dollar index, which measures the US currency against six others, rose 0.4 per cent to its strongest level in 16 months. The British pound faded late in the day, ending roughly flat against the dollar at $1.3412.
Brent crude, the oil benchmark, began retracing earlier losses in the New York afternoon, clawing back from a dip of almost 2 per cent to end the day 0.1 per cent lower at $82.05 a barrel.