Following an initial surge, stocks have declined throughout Monday's trading session. Major averages have now dropped, moving from their session highs towards negative territory. Currently, all major averages are down; the technology-heavy Nasdaq marginally by 1.36 points (less than a tenth of a percent) to 16,378.10, the S&P 500 by 12.78 points (0.2 percent) to 5,241.57, and the Dow by 223.37 points (0.6 percent) to 39,584.00.
Traders began reacting to the latest U.S. consumer price inflation data that was unveiled while the markets were closed for Good Friday, which is what initially sparked the growth in Wall Street. The statistics from the Commerce Department indicated the annual consumer price growth rate for February rose slightly to 2.5 percent from January's 2.4 percent figure; this was expected.
Meanwhile, the year-over-year growth rate of core consumer prices (excluding food and energy prices) decreased slightly from an adjusted January figure of 2.9 percent to 2.8 percent in February. This was contrary to economists' expectations of maintaining the previously reported 2.8 percent rate for the earlier month.
These inflation measures, favored by the Federal Reserve, were part of the Commerce Department's February report on personal income and spending.
However, unexpected modest U.S. manufacturing growth reported for March by the Institute for Supply Management led to a rise in Treasury yields, which, in turn, caused stocks to pull back.
The ISM-reported manufacturing PMI rose from February's 47.8 to 50.3 in March. That indicates sector growth and exceeded economists' expectations of an increase to just 48.4. This marked the first return to expansion since September 2022.
In terms of sector news, telecom stocks have endured significant selling pressure throughout the session, driving the NYSE Arca North American Telecom Index down by 1.4 percent. AT&T shares dipped by 1.3 percent after announcing that a data set exposed on the dark web two weeks ago affected about 7.6 million current and 65.4 million former account holders.
Interest rate-sensitive commercial real estate and utilities stocks also declined, alongside pharmaceutical, healthcare, and brokerage stocks. However, computer hardware, gold, and semiconductor stocks showed resilience. Notably, Micron Technology shares surged by 6.5 percent after Bank of America raised its stock price target from $120 per share to $144 per share.
In overseas activity, Asia-Pacific markets reported mixed results on Monday, with several being closed for holidays. Japan's Nikkei 255 Index decreased by 1.4 percent, while China's Shanghai Composite Index increased by 1.2 percent. However, all major European markets remained closed due to Easter Monday.
In the bond market, the latest U.S. economic data triggered a significant decline in treasuries. Consequently, the yield on the benchmark ten-year note rose by 10.9 basis points to 4.315 percent reflecting an inverse of its price.
