U.S. Stocks Drop From Record Highs; Dollar Falls: Markets Wrap

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(Bloomberg) — U.S. stocks retreated from all-time highs as investors awaited the heart of the corporate earnings season and more economic data later in the week. The dollar fell.

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The S&P 500 snapped a two-day rally. Cryptocurrency-linked stocks slid, following a weekend rout for Bitcoin. Tesla Inc. sank as one of its electric cars that “no one” appeared to be driving crashed and killed two passengers. Peloton Interactive Inc. slipped on a U.S. safety agency warning about the company’s treadmill risks. Harley-Davidson Inc. and Coca-Cola Co. rose as sales beat estimates. GameStop Corp. jumped after saying Chief Executive Officer George Sherman will leave before the end of July.

The economic calendar is light this week until Thursday, with reports on unemployment claims and home sales among those scheduled for release. Robust economic data helped push stocks to another record last week despite concerns surrounding the spread of Covid-19 variants. Traders will look for further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace.

“We think that because valuations are where they are — making frequent records and valuations looking stretched across a lot of areas in the market — that there is a high likelihood you’ll see some periods of volatility,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors.

© Bloomberg Global equities near record highs

For Matt Maley, chief market strategist for Miller Tabak + Co., the sharp drop in Bitcoin over the weekend is having an impact on trading as well.

“Whenever a headline-grabbing asset sees a big decline at a time when the broad market stands at an expensive level, it usually has a negative impact on the stock market, even if it’s only short-lived,” he wrote.

Here are some key events to watch this week:

Apple’s first product unveiling of the year on Tuesday.Reserve Bank of Australia releases minutes of its policy meeting on Tuesday.EIA crude oil inventory report on Wednesday.European Central Bank rate decision and President Christine Lagarde briefing on Thursday.U.S. releases new home sales data

These are some of the main moves in markets:

Stocks

The S&P 500 fell 0.3% as of 10:29 a.m. New York timeThe Nasdaq 100 fell 0.7%The Dow Jones Industrial Average fell 0.3%The Stoxx Europe 600 was unchangedThe MSCI World index was little changed

Currencies

The Bloomberg Dollar Spot Index fell 0.4%The euro rose 0.4% to 1.2030The British pound rose 1% to 1.3969The Japanese yen rose 0.6% to 108.16 per dollar

Bonds

The yield on 10-year Treasuries advanced two basis points to 1.599%Germany’s 10-year yield advanced three basis points to 0.228%Britain’s 10-year yield was little changed at 0.771%

Commodities

West Texas Intermediate crude rose 0.3% to $63 a barrelGold futures fell 0.3% to $1,774 an ounce

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