U.S. stock markets closed lower on Monday led by sell-off in technology shares as investors remained concerned about the rising inflation and potential tightening of monetary policy. Moreover, investors’ sentiment was also dampened as a new survey by the U.S. Federal Reserve found that nearly one-fourth of the adult population were worse off financially from the COVID-19 pandemic. All the three major stock indexes closed the day in red.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.2%, closing at 34,327.79, snapping its two-day winning streak. Notably, 17 components of the 30-stock index ended in red while 13 finished the day in green.

Moreover, the tech-heavy Nasdaq Composite closed the day at 13,379.05, down 0.4%, reversing its gains from the previous two sessions, on the back of weak performance by large-cap technology stocks. Meanwhile, the S&P 500 lost 0.3%, closing the day at 4,163.29, giving up its gains from the previous two sessions. The Utilities Select Sector SPDR (XLU) and the Communication Services Select Sector SPDR (XLC) fell 0.8% and 0.8%, respectively. Notably, seven out of eleven sectors of the benchmark index closed in the negative zone and four in the green.

The fear-gauge CBOE Volatility Index (VIX) was up 4.8% to 19.72. A total of 9.8 billion shares were traded on Monday, lower than the last 20-session average of 10.5 billion. Advancers outnumbered decliners on the NYSE by a 1.13-to-1 ratio. On Nasdaq, a 1.06-to-1 ratio favored advancing issues.

Technology Shares Led Wall Street Lower on Mounting Inflation Worries

Shares of heavyweight technology names led Wall Street lower in Monday’s session as concerns about rising inflation dented investors’ sentiment as the high-flying technology growth stocks can be negatively impacted if inflation rises. Investors also remained worried about the potential tightening of monetary policy by the U.S. Federal Reserve.

Notably, market participants are looking toward the release of the minutes of the Fed’s recent policy meet on May 19. The minutes of the policy meet should provide investors with a better understanding of the Fed’s tolerance level for inflation.

Shares of technology behemoths like Apple Inc. (AAPL Quick QuoteAAPL - Free Report) , Netflix, Inc. (NFLX Quick QuoteNFLX - Free Report) and Facebook, Inc. dropped 0.9%, 0.9% and 0.2%, respectively, to start the week. Notably, Facebook carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

New Fed Survey Found Nearly One-Fourth of Adults Being Worse off Financially From COVID-19 Pandemic

In a report titled Economic Well-Being of U.S. Households in 2020, the Fed found that nearly one-fourth of the adult population found themselves in a worse off position financially due to the COVID-19 pandemic. Moreover, the survey showed that the downturn in financial health happened broadly across the population.

Notably, the survey also found that 43% of adults rated their local economic conditions being “good” or “excellent” in 2020, which was lower than 63% of adults who had given a positive assessment of their local economic conditions in 2019.

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