Stocks ended modestly lower Monday as Wall Street came off a rough week driven by concerns over what effect rising inflation would have on the U.S. recovery.
A spike in COVID-19 cases, particularly in Thailand and Taiwan, dented sentiment.
The Dow Jones Industrial Average finished down 54 points, or 0.16%, to 34,327, and the S&P 500 declined 0.25%
Stocks in the energy and materials sectors were Monday's best performers.
"After a bullish start to the month, it seems as though the bears gained the upper hand for most of last week as signs of inflation - real or perceived - rattled the market," said Chris Larkin, managing director of trading and investing product at E-Trade.
"While tech is no doubt feeling some extra heat from inflation jitters, it’s a little early to start throwing around the 'wreck' word."
Stocks closed higher Friday but posted losses for the week as inflation fears had Wall Street worried the Federal Reserve could boost near-zero interest rates and begin tapering asset purchases earlier than it has signaled.
The Dow fell 1.1% last week, the S&P 500 declined 1.4% and the Nasdaq dropped 2.3%. Last week's three-day stretch between Monday and Wednesday saw the biggest declines since last October.
Wall Street will be paying close attention this week to minutes from the Fed's meeting in April for the central bank's thoughts on price pressures and hints on when it might begin pulling back support.
Treasury yields were rising to 1.639%. They dropped last week following a report that said U.S. retail sales in April stalled as the impact of government stimulus faded and consumers pulled back spending in the waning months of the pandemic.
Focus was on the media sector after AT&T (T) - Get AT&T Inc. Report confirmed it would merge its WarnerMedia division with Discovery (DISCA) - Get Warner Bros Discovery Inc Com Ser A Report. The deal is valued at $43 billion.
Discovery shares fell 5.1% on Monday after rising sharply earlier in the session. AT&T fell 2.7%.
Two major providers of cable TV and internet also fell: Charter Communications (CHTR) - Get Charter Communications Inc. Report, parent of Spectrum, gave up 3.3%, and Comcast (CMCSA) - Get Comcast Corporation Class A Common Stock Report was off 5.5%.
Bitcoin traded lower but was steadying following comments from Tesla (TSLA) - Get Tesla Inc. Report Chief Executive Elon Musk. The founder of the electric vehicle company clarified statements he made over the weekend by tweeting early Monday that "To clarify speculation, Tesla has not sold any Bitcoin."
Major retailers will be reporting earnings this week. Walmart (WMT) - Get Walmart Inc. Report and Home Depot (HD) - Get Home Depot Inc. (The) Report kick things off on Tuesday, and Target (TGT) - Get Target Corporation Report reports later in the week.