U.S. stocks tumbled Thursday, while Treasury yields sank for a fourth day, as investors unwound bets on a spell of high growth and inflation.
The S&P 500 lost 1.4% Thursday morning, a sharp reversal from Wednesday when the broad stock-market gauge closed at a record. The Dow Jones Industrial Average slid roughly 450 points, or 1.4%. Meanwhile, the technology-heavy Nasdaq Composite, which also notched a new high Wednesday, fell 1.4%.
Thursday’s selloff across the U.S. market was broad-based, and came after investors pulled back from equities around the globe. All 11 sectors of the S&P 500 traded lower, with companies including Carnival , Discover Financial Services and Expedia Group posting among the steepest declines. Each recently lost 3.5% or more.
Stocks have powered to a series of records this year, but some investors have grown concerned about the outlook for the economy on signs that labor shortages and supply-chain bottlenecks may crimp the pace of recovery. The spread of the highly contagious Delta variant of coronavirus globally is adding to worries. Investors also are gearing up for a spell of potentially volatile summer trading, when trading desks tend to be lightly staffed.
“There is a bit of a recognition that things aren’t looking as economically positive as they were in mid-June when everything seemed to be hitting that Goldilocks middle ground,” said Edward Park, chief investment officer at Brooks Macdonald. “Delta, or the next Delta, will be a recurring risk in markets,” Mr. Park said, adding that surveys of U.S. activity had fallen short of expectations in recent days.