By Joe Wallace 

U.S. stocks edged down Monday, signaling muted losses for major indexes at the opening bell following a week in which concerns about inflation whipsawed markets.

The S&P 500 ticked down 0.2%. The broad market gauge retreated over 1.3% last week. The Dow Jones Industrial Average also slid 0.6% Monday, while the technology-concentrated Nasdaq Composite Index fell 0.6%.

With earnings season drawing to a close, investors remain focused on whether a recent jump in inflation will blow over or become entrenched. A protracted spell of faster growth in consumer prices could prompt the Federal Reserve to tighten monetary policy, potentially hurting stocks and other assets that have gained from low interest rates.

Those concerns last week led the S&P 500 to post its biggest decline since late February, even after staging a rebound on Friday. Highflying tech stocks have been particularly vulnerable to worries about inflation: The Nasdaq Composite has fallen for four straight weeks, its longest losing streak since August 2019.

"We see this as transitory, but you never know: there is stuff in here that could take a bit longer," said Lars Skovgaard Andersen, investment strategist at Danske Bank Wealth Management. "There will be some volatility in markets still."

Ahead of the opening bell, Discovery's Class-A shares jumped over 10%. The television company said it would combine its media assets with those of AT&T into a new publicly traded company. AT&T, which would receive $43 billion, rose over 5%.

ViacomCBS rose more than 2% in premarket trading. The media company said late Friday it will reclaim Les Moonves's $120 million severance package, resolving a more than two-year dispute with the former chief executive over his termination.

In the bond market, the yield on 10-year Treasury notes ticked down to 1.633%, from 1.639% Friday. Yields fall when bond prices rise.

Quickening inflation has sharpened focus on statements by Fed officials, who have made the case that the pickup will fade, allowing the central bank to keep supporting the economy. Vice Chair Richard Clarida is due to speak at the Federal Reserve Bank of Atlanta Financial Markets Conference at 10:05 a.m. ET.

Bitcoin dropped over 9% to $44,911.55 after a tweet by Tesla Chief Executive Elon Musk prompted speculation that the electric-vehicle maker had sold, or would sell, its holdings of the cryptocurrency. Mr. Musk later tweeted that Tesla hadn't sold any bitcoin. Tesla shares fell about 2% premarket.

Gold futures rose 0.5% to $1,847.30 a troy ounce, their highest level since the start of February. Money has started to flow back into the SPDR Gold Trust, the biggest gold-backed exchange-traded fund, this month.

In overseas markets, the Stoxx Europe 600 ticked down 0.2%.

Chinese stocks rose after data showed the nation's industrial output jumped 9.8% year-over-year in April, beating forecasts, while retail sales rose by a lower-than-expected 17.7%. The Shanghai Composite Index advanced 0.8%.

The mixed figures suggested China would stick to accommodative monetary and fiscal policy for now, said David Chao, global market strategist for Asia Pacific ex-Japan at Invesco. "It is read as a positive catalyst," he said.

In Taiwan, the benchmark Taiex fell a further 3%, building on a pullback of more than 8% last week. Over the weekend, authorities implemented more restrictive measures to combat Covid-19 amid a spike in new local infections, and on Monday Taiwan reported a record high of 333 new local cases.

The recent Taiwanese selloff was partly a knee-jerk reaction to tighter social distancing measures, said Mr. Chao at Invesco. In addition, he said it reflected an unwinding of margin trading by individual investors using borrowed money, and a broader rotation from fast-growing technology stocks to so-called value stocks with more modest valuations.

Japan's Nikkei 225 lost 0.9% by the close.

Chong Koh Ping in Singapore contributed to this article.

Write to Joe Wallace at Joe.Wallace@wsj.com

(END) Dow Jones Newswires

May 17, 2021 09:47 ET (13:47 GMT)

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