Stocks finished mixed on Monday as Wall Street weighed inflation risks and the implications of a global tax agreement on the biggest U.S. tech companies.
The Dow Jones Industrial Average ended down 126 points, or 0.36%, to 34,630 and the S&P 500 dipped 0.08%.
The Nasdaq ended 0.49% higher as investors weighed the impact that a 15% global corporate tax agreement secured by the G-7 over the weekend would have on the tech giants.
The G-7 agreement, while certainly historic, must also find approval among recalcitrant leaders of the G-20 before it affects tech giants such as Apple (AAPL) - Get Report, Alphabet's (GOOGL) - Get Report Google, Facebook (FB) - Get Report and Amazon (AMZN) - Get Report. That process could take several years.
Stocks finished higher Friday and tech shares surged after the U.S. added fewer-than-expected jobs to payrolls in May. The report led investors to believe the Federal Reserve won't be paring back its $120 billion of monthly asset purchases anytime soon. The S&P 500 had closed at 4,229, just short of a record.
The Dow gained 0.7% for last week, the S&P 500 rose 0.6% and the Nasdaq added 0.5%.
Wall Street this week is awaiting Thursday's report on consumer prices for further signs of inflation risks. The Federal Reserve has argued that as the economy recovers from the coronavirus pandemic, any spikes in inflation will be transitory.
Treasury Secretary Janet Yellen said President Joe Biden should push forward with his $4 trillion spending plans even if they cause an inflation spike into next year. She also told Bloomberg in an interview that slightly higher interest rates would be a plus.
“If we ended up with a slightly higher interest rate environment, it would actually be a plus for society’s point of view and the Fed’s point of view,” Yellen told Bloomberg.
The yield on the benchmark 10-year Treasury was up slightly to 1.57% on Monday.
"So as we hover around record highs, keep in mind that it’s normal for the market to take a bit of a breather as we kick off the week," said Chris Larkin, managing director of trading and investing product at E-Trade.
"And though inflation fears may be on the back burner for now, CPI data out on Thursday could put it back in the spotlight."
The approval makes aducanumab the first new treatment for Alzheimer’s disease in nearly two decades.
Tesla (TSLA) - Get Report ended up 1% after falling earlier in the session due to concern about the pace of car sales in China and founder and CEO Elon Musk's move to pull the plug on the higher-end version of the company's Model S Plaid sedan.
Bitcoin fell slightly to $35,661. The world's largest cryptocurrency set a record of more than $64,000 in mid-April.
El Salvador President Nayib Bukele said he was putting together proposed legislation to make Bitcoin legal tender alongside the U.S. dollar in the Central American nation.