Standard & Poor’s closes lower after rising last week with focus on inflation

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, March 21, 2022. REUTERS/Brendan McDermid/File Photo

May 31 (Reuters) – The Standard & Poor’s 500 Index closed lower on Tuesday after a three-session rally as volatile oil trading remained the focus of inflation and investors responded to hawkish comments from a Federal Reserve official.

After outperforming earlier in the session, Standard & Poor’s energy sector (.SPNY) Ground was lost as oil prices reversed after a report that some OPEC members were exploring the idea of ​​Russia suspending an oil production deal, which could pave the way for other producers to pump significantly more crude.

Federal Reserve policy was also a top priority for investors, with US President Joe Biden and Federal Reserve Chairman Jerome Powell meeting on Tuesday to discuss inflation, which Biden said before the meeting was his “top priority.” Read more

This was after Federal Reserve Governor Christopher Waller said on Monday that the US central bank should be prepared to raise interest rates by half a percentage point at each meeting from now on until inflation is decisively curbed. Read more

“The market is trying to figure out the endgame for the Fed,” said Jack Janasevic, portfolio manager at Natixis Investment Solutions.

And while lower commodity prices would be good news for stocks in the long run, the impact of the report on OPEC and Russia on the energy sector may have scared the broader market a bit on Tuesday.

“That’s the thing that makes the market nervous,” Janasiewicz said. “When we started, the sector that leads us to the top was energy.”

According to preliminary data, the S&P 500 . index (.SPX) It lost 24.52 points, or 0.59%, to close at 4,133.72 points, while the Nasdaq Composite lost. (nineteenth) It lost 48.62 points, or 0.40%, to 12,082.51 points. Dow Jones Industrial Average (.DJI) It fell 190.80 points, or 0.57%, to 3,306.27 points.

The three indices rebounded last week, breaking a series of consecutive losses that lasted for decades.

Carol Schleif, deputy chief investment officer at BMO Family Office, said she sees stocks trading sideways for some time due to uncertainty including Russia and Ukraine war, the global economy and inflation, as well as Fed policy.

“Part of it is energy prices because those impact the margins on people’s propensity to spend,” she said. “People are already noticing higher prices in the grocery store.”

Earlier today, US consumer confidence data showed a slight dip in May amid persistently high inflation and rising rates, while a separate reading showed US home price growth unexpectedly heated up to record levels in March. Read more

Other key data due this week is the monthly non-farm payroll numbers for labor market signals.

US-listed Yamana Gold Inc shares surged after South African mining company Gold Fields Ltd (GFIJ.J), agreed to buy the Canadian miner in a $6.7 billion all-share deal. Read more

Dexcom Corporation (DXCM.O) It jumped after the glucose monitoring system maker denied a report of merger talks with insulin pump maker Insulet Corp (PODD.O).

Additional reporting by Sinad Karo, Anisha Sircar, Devik Jain and Sruthi Shankar in Bengaluru; Edited by Margarita Choi

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