By Joe Wallace and Alexander Osipovich 

U.S. stocks fell Monday, weighed down by declines among technology shares, as concerns about inflation continued to unsettle investors.

The Dow Jones Industrial Average fell 54.34 points, or 0.2%, to close at 34327.79. The S&P 500 dropped 10.56 points, or 0.3%, to 4163.29. The tech-heavy Nasdaq Composite declined 50.93 points, or 0.4%, to 13379.05.

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 benefited from low interest rates.

Those concerns last week led the S&P 500 to post its biggest weekly decline since late February. Highflying tech stocks have been particularly vulnerable to worries about inflation: The Nasdaq 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."

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.

Top Fed officials said Monday that they saw the recent bout of price increases as transitory and reiterated their support for stimulus. Federal Reserve Vice Chairman Richard Clarida, the Fed's second-in-command, said the U.S. economy had yet to reach the "substantial further progress" that would be needed before the Fed pared back bond purchases.

Another member of the Fed's rate-setting committee, Federal Reserve Bank of Atlanta President Raphael Bostic, said he wasn't ready for the central bank to dial back its support for the economy. Speaking on CNBC, Mr. Bostic said it could take months to get a good reading on inflation.

Gold, a traditional hedge against inflation, rose to its highest levels in more than four months. Futures on the precious metal gained 1.6% to $1,867.50 a troy ounce, their highest settle since early January. Money has started to flow back this month into the SPDR Gold Trust, the biggest gold-backed exchange-traded fund.

In other commodity markets, U.S. oil futures climbed 1.4% to $66.27 per barrel, their highest settle since April 2019, on signs of a revival in air travel and hopes that economic recovery will bolster fuel consumption.

Investors have pivoted away from tech stocks that flourished during the pandemic and are now better off buying shares of "boring companies" that are well positioned for growth as the U.S. emerges from the pandemic, said Josh Rubin, a portfolio manager for Thornburg Investment Management.

"We're in a point where nuance matters a lot for investors considering the reopening trade," Mr. Rubin said.

Bitcoin tumbled after a tweet by Tesla Chief Executive Elon Musk prompted speculation that the electric-car maker had sold, or would sell, its holdings of the cryptocurrency. Mr. Musk later tweeted that Tesla hadn't sold any bitcoin. Shares of Tesla fell $12.91, or 2.2%, to $576.83.

Communications, technology and utilities were the worst-performing sectors of the S&P 500 on Monday. Energy was the best-performing sector, boosted by the climbing price of crude.

In corporate news, AT&T gave up early gains and closed down 87 cents, or 2.7%, to $31.37. The telecom giant agreed with Discovery to combine the two companies' media assets into a new, publicly traded company. AT&T would receive $43 billion under the deal.

Discovery stock was volatile. Class A shares of the television company slumped $1.80, or 5%, to $33.85 after initially jumping more than 11% in morning trading.

In the bond market, the yield on 10-year Treasury notes settled at 1.639%, unchanged from Friday.

Overseas, the Stoxx Europe 600 ticked down less than 0.1%. Chinese stocks rose after data showed the nation's industrial output jumped 9.8% year over year in April, beating forecasts. The Shanghai Composite Index advanced 0.8%.

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

Japan's Nikkei 225 lost 0.9%.

Chong Koh Ping in Singapore contributed to this article.

Write to Joe Wallace at and Alexander Osipovich at


(END) Dow Jones Newswires

May 17, 2021 16:48 ET (20:48 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.