Dollar hits 16-month high while U.S. stocks drop slightly

by Jonathan Adams
Dow Jones

The Dow Jones Industrial Average shed 0.04%, the S&P 500 closed flat, and the Nasdaq Composite declined 0.04%

The dollar jumped to a 16-month high on Monday while U.S. stocks dropped slightly as investors searched for a clearer economic picture.

Persistent concerns that inflation may be rising more sharply and sticking around longer than originally expected weighed on Wall Street, with pessimism weighing on stocks and oil and pushing safe havens like the U.S. dollar upwards.

The Dow Jones Industrial Average (DJI) shed 0.04%, the S&P 500 closed flat, and the Nasdaq Composite declined 0.04%.

The MSCI world equity index, which tracks shares in 45 nations, gained 0.08%.

Investors likely will be closely watching fresh data on U.S. retail sales out on Tuesday, after a report out Friday showed consumer sentiment hitting its lowest point in a decade, due in part to inflation.

Stocks were more or less in a holding pattern today, and after the market finished last week in the red, it could be searching for some direction, said Mike Loewengart, managing director of investment strategy at E*TRADE Financial. As inflation continues to be the topic du jour, investors likely have their sights set on an update from retailers with earnings and retail sales on deck for some insight into the consumer and how they’re handling pricing pressure.

Rising Treasury yields also helped push equity prices lower, with benchmarks hitting three-week highs as companies rushed to debt markets ahead of the holiday stretch.

The 20-year bond yields added 5 basis points to 2.04% while 30-year bond yields rose 5 basis points to 2.01%.

Benchmark 10-year yields added 4 basis points to 1.62% and are up from a one-month low of 1.42% last Tuesday.

Investor concern helped push the U.S. dollar to a 16-month high against major peers Monday, as its safe-haven status proved appealing in uncertain times.

The dollar index hit 95.510 on Monday, its highest since July 2020, and was last up 0.398% at 95.394.

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