Equities finished lower Monday, with the S&P 500 shedding 0.5 percent and the Dow dropping more than 120 points, following gains last week that saw stocks reach new highs.
Health care and financials led today while technology lagged.
Treasury yields drifted slightly to the upside but remain well off of recent highs, with the 10-year benchmark rate near 1.6 percent.
Overall, it was a quiet start to the week with no major economic releases or corporate announcements.
The markets took a breather today but continue to be guided by the economic reopening and first quarter earnings results, which got off to a good start last week with better-than-expected profits from big banks.
Approximately half of U.S. adults have now received at least one vaccine dose, supporting the outlook for the economic reopening.
An announcement is expected later this week determining if and when the Johnson & Johnson vaccine will return to distribution.
Growing vaccinations, improving employment conditions, and fiscal stimulus remain key pillars of the rebound, with the latter likely to see ongoing negotiations on the size and details of President Joe Biden’s proposed infrastructure bill.
Another upcoming bipartisan meeting will probably include discussions over a scaled-down package and some middle ground on the proposed hike in the corporate tax rate.
U.S. stocks are up roughly 11 percent so far this year, reflecting a positive fundamental outlook that should include boom-type growth for the U.S. economy in coming quarters.
A compelling rebound in corporate profits is taking shape on the back of that economic growth, which has helped broaden the market gains more recently as a wider number of stocks and sectors reach new highs.
This supports the case for increased diversification across asset classes and sectors, with leadership rotating as the bull market progresses.
Expectations are high, raising the potential for short-term setbacks, but the outlook remains favorable this year.