Inflation may be pulling down profits after a year of big companies passing along almost all their price increases onto their customers.
NEW YORK — Stocks closed slightly lower after a wobbly day of trading Monday, as worries about interest rates and inflation keep a lid on Wall Street despite some better-than-expected profit reports. The S&P 500 slipped less than 0.1 percent. The benchmark index was coming off its second straight week of losses. Like it, the other two major U.S. stock indexes also rolled between small gains and losses Monday. The Dow Jones Industrial Average and Nasdaq each fell 0.1 percent. Among S&P 500 companies, a slide in health care, industrial and other sectors narrowly edged out gains in technology, financial, energy and other stocks. That pulled the index 0.90 points lower to 4,391.69. The Dow, meanwhile, dropped 39.54 points to 34,411.69. Stocks have struggled this year as the highest inflation in generations forces the Federal Reserve into a U-turn on the low-interest-rate policies that helped markets soar and the economy to rev in recent years. The central bank has already raised short-term rates once, and investors are expecting it to raise rates by double the usual amount in a couple weeks, with more likely on the way. The Fed is also preparing investors for a sharp reversal in its massive efforts to keep longer-term rates low. Stocks have often moved in the opposite direction of Treasury yields, and the 10-year yield is near its highest level since 2018, at 2.85 percent late Monday afternoon. Higher yields put downward pressure on all kinds of investments, from gold to cryptocurrencies, and the stocks seen as the most expensive tend to get hit hardest.
