Persistent weakness in technology stocks kept major indices under pressure on Monday after above-expected inflation levels last week sparked a downturn in equity markets.

The Dow Jones Industrial Average opened about 50 points while the S&P 500 lost 0.2%. The Nasdaq Composite fell 0.7%.

Big Tech quickly came under pressure to start the week. Apple and Facebook each fell 0.8%, Netflix 1%, and Google Parent Alphabet 0.6%. Traders have been punishing the tech sector over the past few weeks as a wider shift from growth stocks to cyclical, reopened energy, finance and materials stores.

Communication Services’ shares, Discovery and AT&T, bucked this trend, both on news of a merger agreement. AT&T announced Monday that it is in advanced talks to merge WarnerMedia, which includes HBO, with Discovery. The new company is traded as a separate stock corporation.

Discovery’s Class C shares rose 17.3% while AT&T rose 4%.

Wall Street has had one of the wildest weeks of 2021, with the S&P 500 down 4% midweek on heightened inflation fears. The broad equity benchmark eventually rebounded, ending the week just 1.4%.

The tech-heavy Nasdaq Composite, which was particularly hard hit by inflation fears, fell 2.3% last week. The blue chip Dow fell 1.1% over the period. All three benchmarks had their worst week since February 26th.

“Not only [last] The week’s events are a warning sign of how uncomfortable inflationary pressures can get, but also a warning sign of how overbought the stock markets have become, “JPMorgan chief executive officer Nikolaos Panigirtzoglou said in a note.

Last week’s data showed that the consumer price index was up 4.2% yoy in April. This was the fastest rate since 2008, adding to fears that the Federal Reserve may be forced to taper its loose monetary policy if price pressures persist.

The Fed’s minutes of its last meeting, released on Wednesday, may provide some clues as to how policymakers are thinking about inflation.

Bitcoin was taken for a wild ride overnight on Sunday. Previously, the price fell below $ 43,000 after Elon Musk hinted on a Twitter exchange that Tesla may have dumped its Bitcoin holdings. Last week, Tesla said it would no longer accept Bitcoin for car purchases due to environmental concerns.

Bitcoin then rebounded some after Musk later made it clear in a tweet that the electric vehicle maker “didn’t sell bitcoin”. The price was last at $ 45,505. The Tesla share lost 1.5%.

Elsewhere, the first quarter earnings season ends with more than 90% of the S&P 500 companies reporting their results. So far, 86% of the S&P 500 companies have reported a positive EPS surprise. That would be the highest percentage of positive earnings surprises since 2008 when FactSet started tracking this metric.

Walmart, Home Depot and Macy’s will all be making profits on Tuesday.

“The reactions of investors and equity analysts to the earnings results show skepticism that 1Q beats are grounds for additional forward-looking optimism,” wrote David Kostin, chief US equity strategist at Goldman Sachs. “Companies that beat EPS estimates, usually outperform the S&P 500 by 100 [basis points] the day after reporting. However, the typical stock, which outperformed EPS for the quarter, only surpassed 51 [basis points]and will continue the trend from 2020. “

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