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U.S. weekly jobless claims rise; continuing claims lowest since 1969

• Initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 218,000 for the week ended May 14, the highest level since January, the Labor Department said on Thursday. Economists polled by Reuters had forecast 200,000 applications for the latest week.
• Though claims have been largely treading water since hitting more than a 53-year low of 166,000 in March, the labor market is rapidly tightening and generating strong wage gains that are helping to fan overall inflation in the economy.
• There were a record 11.5 million job openings at the end of March. Claims are down from an all-time high of 6.137 million in early April 2020.

https://www.cnbc.com/2022/05/19/us-weekly-jobless-claims-rise-continuing-claims-lowest-since-1969.html

S&P 500 falls again on Thursday, pushing the benchmark to the brink of a bear market

The S&P 500 fell again on Thursday, pushing the average to the brink of a bear market, as investors continued to dump equities on fears Federal Reserve rate hikes to fight rapid inflation would tip the economy into a recession.

The broad market index shed 0.5%, putting it 19.5% below its intraday record reached in January. It also sits a little more than 19% below its record closing level. A close of 20% or more below its all-time high would mark a bear market, its first since the March 2020 pandemic sell-off.

S&P 500′s rapid decline from January record

S&P 500 YTDWATCHLIST+

ChartLine chart with 251 data points.The chart has 1 X axis displaying Time. Range: 2021-12-30 00:00:00 to 2022-05-18 00:00:00.The chart has 1 Y axis displaying values. Range: 3800 to 5000.Jan 10Jan 24Feb 7Feb 21Mar 7Mar 21Apr 4Apr 18May 2May 163800400042004400460048005000cnbc.comEnd of interactive chart.

The Dow Jones Industrial Average fell 299 points, or 1%, a day after it experienced the biggest one-day drop since 2020. The Nasdaq Composite was flat, though it teetered back and forth between gains and losses on Thursday morning.

“The main takeaway for investors is to brace for extended volatility,” said Greg Bassuk, CEO at AXS Investments. “We believe that volatility is going to be the investor narrative for the balance of Q2, and frankly, you know, for the balance of 2022.”

On Wednesday, the Dow fell more than 1,100 points, marking its worst sell-off in nearly two years. The S&P 500 also suffered its worst one-day decline since June 2020, losing about 4%, and the Nasdaq Composite fell 4.7%.

Those losses were driven in part by back-to-back quarterly reports from Target and Walmart that showed higher fuel costs and restrained consumer demand hurting results amid the hottest inflation in decades. Even after a 24% drop on Wednesday, Target shares were lower again Thursday by 2%.

“The sharp sell-off in these companies (as well as other goods/consumer companies this quarter) shows that inflationary pressures are finally having an impact on earnings,” Maneesh S. Deshpande, head of U.S. equity strategy at Barclays, said in a Thursday note. “Despite heightened inflation for a better part of a year, [S&P 500] margins and forward earnings have remained resilient, which no longer seems to be the case.”

Cisco was the latest major company to plunge on results with the tech bellwether down 13% Thursday. Cisco said after the bell Wednesday that quarterly revenue fell short of analysts expectations and it warned revenue would disappoint in the current quarter.

Stocks have been under pressure all year with investors first pivoting away from highly-valued tech stocks with little profits. But the sell-off has since spread to more sectors of the economy, including banks and retail, as growing fears of a recession spooked investors.

“The issue now is there really appears to be nowhere to hide,” wrote Jonathan Krinsky, chief market technician with BTIG. On Wednesday, “they came for consumer names, but they still sold beaten down growth. In other words, money is rotating into cash instead of between different sectors.”

“While it won’t be a straight line, [this] is confirmation that selling rallies in bear markets is much easier than buying dips,” Krinsky said.

Investors remained concerned that aggressive action by the central bank to tamp down inflation would spark a steeper downturn. During a Wall Street Journal Conference on Monday, Federal Reserve Chair Jerome Powell reiterated his comments that “there won’t be any hesitation” to bring down inflation.

Several Wall Street strategists issued some dire forecasts for stocks should the Fed’s rate increases tip the economy into a recession. GDP in the first quarter decreased at a 1.4% rate so some slowing is already being seen.

Deutsche Bank cut its official target for the S&P 500 overnight, but said a recession would bring even bigger losses.

“In the event we slide into a recession imminently, we see the market selloff going well beyond average, i.e., into the upper half of the historical range and given elevated initial overvaluation, -35% to -40% or S&P 500 3000,” wrote Binky Chadha, Deutsche Bank’s chief global strategist in a note.

Meanwhile, U.S. weekly jobless claims rose to 218,000 for the week ending May 14, the Labor Department said Thursday, the latest hint that economic growth is slowing.

The Dow has declined for seven straight weeks and is down 14% in 2022. The Nasdaq is down 27% this year. The S&P 500 has lost 18%

Stock futures fall as more companies warn about higher costs, Target shares crater

U.S. stock futures fell on Wednesday morning after another major retailer warned of rising cost pressures, confirming the fears over inflation that have sent major benchmarks to big losses so far this year.

Futures for the Dow Jones Industrial Average shed 167 points, or 0.5%, with the average set for its first loss in four days. S&P 500 futures traded 0.7% lower, while Nasdaq 100 futures slipped 1%.

Those losses come after a disappointing earnings report from Target. Shares tumbled more than 24% in premarket trading Wednesday after Target reported first-quarter earnings that were much lower than Wall Street estimated because of higher costs for fuel and compensation. The retailer also saw lower-than-expected sales for discretionary merchandise like TVs.

Target’s report comes right after Walmart on Tuesday posted earnings that fell short of expectations as it too cited higher fuel and labor costs. Walmart shares ended Tuesday lower by 11%. They were down another 2% in premarket trading Wednesday.

“Any company that relies on households and discretionary purchases will likely suffer this quarter because a lot of discretionary income has been funneled to food and energy prices,” said Jack Ablin, founding partner of Cresset Capital.

Other retailers took a hit on the back of Target’s quarterly earnings miss, with the SPDR S&P Retail ETF slipping more than 4% in Wednesday premarket trading. Best Buy’s stock price dropped more than 6% in premarket trading, Dollar General’s fell more than 6% in premarket trading and Dollar Tree’s declined more than 5% in premarket trading.

Lowe’s shares fell more than 2% in premarket trading after missing sales expectations in its first quarter report as shoppers bought fewer supplies for outdoor projects.

More notable decliners in retail included shares of Macy’s, which dropped 7% in premarket trading, and shares of Kohl’s, which fell more than 5% in premarket trading.

Wednesday’s market reversal comes after shares had been mounting a comeback off the year’s lows. On Tuesday, the Dow rose 431 points, or 1.3%, while the S&P 500 gained 2% and the Nasdaq Composite climbed nearly 2.8%.

The Dow has declined for seven straight weeks, but stocks have stabilized over the last three trading sessions. Last week, the S&P 500 fell to the brink of a bear market — or 20% below its record high — but the index has now gained 4% since Thursday’s close.

Despite the recent comeback, the S&P 500 is down 14% for the year, while the Nasdaq Composite is off by 23%.

Gas prices have steadily marched higher, contributing to inflationary pressures seen across the economy. The national average for a gallon of regular gasoline hit a record $4.567 on Wednesday, according to AAA. Prices are 48 cents more than a month ago, and $1.52 more than what consumers paid last year.

Every single state is now averaging above $4 per gallon, with some states paying much more. In California, the statewide average has crossed $6.

The yield on the benchmark 10-year Treasury note topped 3% on Wednesday morning as investors weighed the prospects of tighter monetary policy.

Stocks and other risk assets have been pressured by inflation and the Federal Reserve’s attempt to tamp down price increases through rate hikes, which has led to concerns about a potential recession. Fed Chair Jerome Powell said at a Wall Street Journal conference on Tuesday that “there won’t be any hesitation” about raising rates until inflation is under control.

However, some recent economic data, including the jobs report and retail sales data from April, still show the U.S. economy growing.

“There’s a big difference between corrections in the equity markets and outright bear markets,” said Matt Stucky, a senior portfolio manager at Northwestern Mutual Wealth Management. “The difference being bear markets are almost always sort of associated with some kind of recessionary macroeconomic environment, or at least an inevitable one in the forecast horizon over the next six-to-12 months. For us, as we sit here today, we just don’t see that.”

U.S. housing starts fall in April; building permits tumble

U.S. homebuilding fell moderately in April, but a sharp decline in permits pointed to a slowdown in the housing market amid rising mortgage rates, which are contributing to reducing affordability for entry-level and first-time buyers.

Housing starts slipped 0.2% to a seasonally adjusted annual rate of 1.724 million units last month, the Commerce Department said on Wednesday. Data for March was revised lower to a rate of 1.728 million units from the previously reported 1.793 million units. Economists polled by Reuters had forecast starts declining to a rate of 1.765 million units.

Permits for future homebuilding dropped 3.2% to a rate of 1.819 million units.

A survey on Tuesday showed the National Association of Home Builders/Wells Fargo Housing Market sentiment index dropped to the lowest level in nearly two years in May.

Builders blamed the fifth straight monthly decline in sentiment on soaring prices for building materials as well as rapidly rising mortgage rates, which were squeezing entry-level and first-time homebuyers from the market.

The 30-year fixed-rate mortgage averaged 5.30% during the week ended May 12, the highest since July 2009. It has increased by more than 100 basis points since mid-March when the Federal Reserve started raising interest rates to cool demand and bring down sky-rocketing inflation.

The U.S. central bank has hiked its policy interest rate by 75 basis points since March. The Fed is expected to increase that rate by half a percentage point at each of its next policy meetings in June and July.

But homebuilding remains underpinned by a record low housing supply. There is a massive backlog of houses approved for construction that are yet to be started. Investment in homebuilding grew moderately in the first quarter. (Reporting by Lucia Mutikani Editing by Chizu Nomiyama)

Canada’s annual inflation rate edges up to 6.8% in April

Canada’s annual inflation rate accelerated again in April, edging ahead of analyst expectations, largely driven by rising food and shelter prices, Statistics Canada data showed on Wednesday.

Headline inflation hit 6.8% in April, just beating analyst forecasts that the annual rate would stay flat at 6.7%, and edging closer to the 6.9% hit in January 1991. It was the 13th consecutive month above the Bank of Canada’s 1-3% control range.

Grocery prices rose 9.7% in April, the largest increase since September 1981, with consumers paying more for nearly everything at the grocery store, said Statscan. Prices for starchy staple foods like pasta and bread led gains.

“Russia’s invasion of Ukraine in late February put upward price pressure on food products that use wheat,” said Statscan. “Poor weather in growing regions has also impacted prices for food.”

Statscan, which will change how its tracks used car prices starting with its release next month, said in a separate paper that March’s headline rate would have been 6.9% instead of 6.7% had the new methodology been in place at the last basket update.

Shelter prices in April rose at their fastest pace since June 1983, as high housing costs and rising rent continued to drive gains, with mortgage interest costs rising on the month for the first time since April 2020.

Gasoline prices fell slightly in April from March. Still, consumers paid 36.3% more at the pump for gasoline in April compared with a year-ago.

The CPI common measure, which the Bank of Canada says is the best gauge of the economy’s performance, rose to 3.2% from an upwardly revised 3.0% in March and ahead of analyst forecasts of 2.9%. CPI trim was 5.1% and CPI median was 4.4%.

The Canadian dollar was trading at 1.2807 to the greenback, or 78.08 U.S. cents.

The pandemic housing boom is winding down. Economists forecast a 10-20% price correction

Economists are predicting that Canadian home prices will fall as much as 20 per cent this year as higher interest rates begin to hit the country’s booming real estate market.

Mortgage rates are expected to climb again as the Bank of Canada aggressively hikes interest rates to deal with runaway inflation. Economists expect higher borrowing costs will lead to a significant price drop in some of the hottest markets.

Toronto-Dominion Bank economist Rishi Sondhi forecasts a double-digit percentage decline in the national average home price over the March to December period this year. Bank of Montreal senior economist Robert Kavcic predicts a 10-per-cent to 20-per-cent drop in the home price index in certain regions.

“When we speak of housing correction it’s not a question of if, but where, how much and for how long,” Mr. Kavcic said in a research note. “Suburban markets in Ontario look shakiest,” he said.

The national home price index, which adjusts for pricing volatility, fell 0.6 per cent to $866,700 from March to April on a seasonally adjusted basis, according to the Canadian Real Estate Association, or CREA. That was the first drop since April, 2020, when homeowners struggled to sell their properties amid the pandemic economic lockdown.

The current drop in home prices was led by smaller markets in Southern Ontario. Oakville-Milton’s home price index was down 5.6 per cent from March to April, while London was off 4 per cent and Cambridge was down by 3.9 per cent, according to CREA.

The housing slowdown has been triggered by a rapid increase in borrowing costs over the past few months. The Bank of Canada’s next interest-rate announcement is scheduled for June 1. The central bank is widely expected to hike interest rates by another 50 basis points.

Realtors have described a sudden change in buyer sentiment. Some homes are not fetching any offers and sitting on the market for upward of a month. That is in contrast to the first two years of the pandemic when homes drew dozens of bidders and sold for hundreds of thousands of dollars over the listed price.

“The pandemic housing boom is clearly winding down. Bidding wars are easing and prices are beginning to flatten,” said Phil Soper, chief executive officer of Royal LePage.

“When markets overshoot as they have for the past two years, they correct,” he said, adding that it was too soon to say that the pendulum had swung completely over into a buyer’s market and that he is observing instances of both multiple offers and homes not selling.

Over all, CREA said the number of resales fell 12.6 per cent from March to April on a seasonally adjusted basis, a sharper drop than the previous month, with volumes falling in most regions across the country.

Cailey Heaps, a realtor who has been selling homes in Toronto for more than two decades, said she is still seeing multiple offers above the listed price but also said: “We are not seeing the same frenzy that was present in the early months of the year.”

CREA said a little more than half of the country was in a balanced market for the first time since June, 2020, when the economy was starting to reopen. Although the number of new listings fell from March to April, buyer demand has also waned.

Even if home prices drop by 20 per cent over the latter half of this year, values will still be higher than before the start of the pandemic. Since January, 2020, the national home price index is up 52.2 per cent.

Compared with April of last year, the home price index is up 23.8 per cent.

Before the Bell: What every Canadian investor needs to know today

Equities

Wall Street futures moved higher early Tuesday as markets weigh results from big U.S. retailers. Major European markets were positive in morning trading. TSX futures gained as crude prices edged higher.

In the early premarket period, Dow and S&P futures were each up by more than 1 per cent while Nasdaq futures advanced more than 2 per cent. On Monday, U.S. stocks put in a mixed session with the Nasdaq losing 1.2 per cent and the S&P 500 falling 0.39 per cent. The Dow edged up 0.08 per cent. Canada’s S&P/TSX Composite Index outperformed, advancing 0.53 per cent on a rally in energy shares.

“Markets remain in fight or flight mode while rolling the dice on recession odds,” Stephen Innes, managing partner with SPI Asset Management, said.

“Still, traders seem to be in the mood to stay bearish until proven otherwise.”

Early Tuesday, investors got results from Home Depot and Walmart as U.S. earnings season continues to wind down.

Home Depot hiked its full-year sales forecast on demand for home improvement tools and building materials. The retailer now expects comparable sales to increase about 3 per cent in fiscal 2022, compared to its previous forecast of a slight positive growth. Analysts were expecting a 1.4-per-cent increase, according to IBES data from Refinitiv.

However, Walmart cut its full-year profit forecast. The company said it expects fiscal 2023 earnings per share to fall about 1 per cent, compared to its previous forecast of a mid-single digit increase.

Meanwhile, Elon Musk’s US$44-billion bid to buy Twitter Inc. remains in the spotlight with Mr. Musk saying the deal can’t move forward until the social media company shows proof that spam bots account for less than 5 per cent of its total users.

“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of <5% (spam accounts). This deal cannot move forward until he does,” Musk said in a tweet.

On Monday, Mr. Musk suggested he could seek a cheaper price for the deal, telling a conference in Miami: “You can’t pay the same price for something that is much worse than they claimed.” Last week, Mr. Musk said the Twitter deal was on hold pending further user data from Twitter.

In this country, The Globe’s Alexandra Posadzki reports that Quebecor Inc. chief executive officer Pierre Karl Péladeau is crediting recent regulatory decisions with encouraging competition in the wireless sector, as Quebecor’s Videotron Ltd. subsidiary prepares to expand its mobile services beyond its home province of Quebec.

Overseas, the pan-European STOXX 600 rose 1.6 per cent in morning trading. Britain’s FTSE 100 gained 0.76 per cent. Germany’s DAX and France’s CAC 40 advanced 1.46 per cent and 1.37 per cent, respectively.

In Asia, Japan’s Nikkei finished 0.42-per-cent higher. Hong Kong’s Hang Seng jumped 3.27 per cent as Chinese tech shares surged.

S&P 500 FUTURES

4,071.50+66.75 (1.67%)

DOW FUTURES

32,582.00+423.00 (1.32%)

TSX 60 FUTURES

1,234.30+11.40 (0.93%)

PAST DAY

1.67%1.32%0.93%

CLOSE, MAY 16

6:35 A.M., MAY 17

SOURCE: BARCHART

Commodities

Crude prices were up in early going helped by optimism over the potential for further easing of COVID-19 restrictions in China and continued efforts in the EU to gradually phaseout Russian crude.

The day range on Brent is US$113.64 to US$115.14. The day range on West Texas Intermediate is US$113.49 to US$114.98.

“Oil prices have remained near multi-week highs this week, supported by surging gasoline and distillate prices in the U.S., and fears around an EU ban on Russian oil imports remaining in play,” OANDA senior analyst Jeffrey Halley said.

Sentiment was underpinned by reports that Shanghai marked a third consecutive day with no new COVID-19 cases outside quarantine zones. Shanghai plans to resume outdoor activities in stages, with most restrictions on movement remaining in place until May 21. The lockdown is likely to be lifted by June.

Markets have been nervously watching the situation in China, concerned that tough COVID-19 restrictions will hit demand and weigh on the broader economy.

Later in the session, traders will get weekly crude inventory numbers from the American Petroleum Institute. More official numbers follow on Wednesday morning from the U.S. Energy Information Administration.

Analysts are expecting to see a further decline in crude stocks.

In other commodities, gold prices steadied.

Spot gold was up 0.1 per cent at US$1,826.29 per ounce by early Tuesday morning. U.S. gold futures gained 0.6 per cent to US$1,825.00.

“The yellow metal has been very vulnerable to rising yields and a stronger [U.S.] dollar recently as central banks are forced into much more aggressive action,” OANDA senior analyst Craig Erlam said in a note.

“With the dollar remaining a hot favourite and pressure intensifying on central banks to tackle inflation, gold could remain out of favour for a while yet.”

HIGH GRADE COPPER

US$4.26+0.07 (1.71%)

SPOT GOLD

US$1,831.80+17.80 (0.98%)

WTI

US$115.18+0.98 (0.86%)

PAST DAY

1.71%0.98%0.86%

CLOSE, MAY 16

6:35 A.M., MAY 17

SOURCE: BARCHART

Currencies

The Canadian dollar was higher, trading around 78 US cents, as its U.S. counterpart eased for a third session against a group of world currencies.

The day range on the loonie is 77.79 US cents to 78.08 US cents.

There were no major Canadian economic releases on Tuesday’s calendar. In the U.S., Federal Reserve chair Jerome Powell will speak at a conference this afternoon on the central bank’s plan for taming inflation.

In world currencies, the U.S. dollar index was down 0.39 per cent to 103.76, more than 1-per-cent below last week’s two-decade high of 105.010, according to figures from Reuters.

The euro rose 0.4 per cent to US$1.0476.

The yen was 0.24-per-cent lower at 129.41 per U.S. dollar, holding above a two-decade low while Britain’s pound jumped 1.2 per cent to US$1.2469.

In bonds, the yield on the benchmark U.S. 10-year note was modestly higher at 2.913 per cent in the predawn period.

CANADIAN DOLLAR/U.S. DOLLAR

US$0.7800+0.0017 (0.2146%)

PAST DAY

PREV. CLOSE1:35 A.M., MAY 17

0:00 A.M., MAY 17

US$0.7794

6:35 A.M., MAY 17

US$0.7800

SOURCE: BARCHART

Economic news

(8:30 a.m. ET) Canada’s international securities transactions for March.

(8:30 a.m. ET) U.S. retail sales for April.

(9:15 a.m. ET) U.S. industrial production for April.

(10 a.m. ET) U.S. NAHB Housing Market Index for May.

(10 a.m. ET) U.S. business inventories for March.

With Reuters and The Canadian Press

Oil prices rise on China demand optimism, gasoline strength

Oil prices rose on Monday on optimism that China would see significant demand recovery after positive signs that coronavirus pandemic was receding in the hardest-hit areas.

Brent crude advanced 2.4% to $114.24, while U.S. West Texas Intermediate (WTI) crude settled 3.4% higher at $114.20 per barrel.

Shanghai aims to reopen broadly and allow normal life to resume for the city’s 25 million people from June 1, a city official said on Monday, after declaring that 15 of its 16 districts had eliminated cases outside quarantine areas.

However, it is estimated that 46 cities in China are under lockdowns, hitting shopping, factory output and energy usage.

“We are seeing a lot of signals that demand will start returning in that region, supporting higher prices,” said Bob Yawger, director of energy futures at Mizuho.

In line with the unexpected industrial output decline, China processed 11% less crude oil in April, with daily throughput the lowest since March 2020.

U.S. gasoline futures set an all-time high again on Monday as falling stockpiles fuelled supply concerns.

“Oil prices will remain bullish, especially WTI’s near-term contract, as U.S. gasoline prices continued to rise amid weaker imports of petroleum products from Europe,” said Kazuhiko Saito, chief analyst at Fujitomi Securities.

Oil prices also found some support as the European Union’s diplomats and officials expressed optimism about reaching a deal on a phased embargo of Russian oil despite concerns about supply in eastern Europe.

Austria expects the EU to agree on the sanctions in the coming days, Foreign Minister Alexander Schallenberg said on Monday.

German Foreign Minister Annalena Baerbock said the bloc would need a few more days to find agreement.

“With a planned ban by the EU on Russian oil and slow increase in OPEC output, oil prices are expected to stay close to the current levels near $110 a barrel,” said Naohiro Niimura, a partner at Market Risk Advisory.

Dow futures rally 400 points, Home Depot jumps on earnings

PUBLISHED MON, MAY 16 20226:06 PM EDTUPDATED 1 MIN AGO

U.S. stock futures were sharply higher on Tuesday morning as the market tried to bounce after a punishing bear market for the tech-heavy Nasdaq and a 19% pullback for the S&P 500.

Futures contracts tied to the Dow Jones Industrial Average jumped 400 points, or 1.4%. S&P 500 futures gained 1.7%, while Nasdaq 100 futures added 2.1%.

Those moves come as several names rose in Tuesday premarket trading. Citigroup shares jumped 5% in premarket trading after a filing revealed Monday evening that Warren Buffett’s Berkshire Hathaway added a nearly $3 billon stake in the struggling bank in the first quarter.

Citi shares have underperformed the rest of the financial sector in the past 12 months, down nearly 40% while the Financial Select Sector SPDR Fund is off by 12% over the same period.

Travel stocks popped in the premarket after United Airlines raised its revenue outlook for the second quarter on improved consumer demand. United Airlines’ stock price rose 4%, Delta’s jumped 3% and American Airlines’ jumped 3%.

Home Depot shares rose more than 3% in the premarket after the home improvement retailer posted better-than-expected quarterly results. The company also raised its full-year outlook.

Semiconductor stocks climbed higher in premarket trading. Shares of Advanced Micro Devices jumped more than 3% following an upgrade from Piper Sandler, which said the stock looked attractive after falling 34.5% this year. Nvidia’s stock price rose 3%, Qualcomm’s jumped 2.4% and Micron Technology’s rose 2%.

Meanwhile, Walmart shares dropped more than 5% in the premarket after the retail giant reported an earnings miss because of inflation pressure. The company raised its sales outlook, but lowered its profit forecast.

Tuesday’s gains come after a strong overnight session in Asia, as traders cheered encouraging Covid news out of China. Tuesday marked the third straight day that Shanghai — a key economic hub in the country that has been hit with a strict Covid lockdown — did not record a virus infection outside of the city’s quarantine zones.

“On top of this, investors were encouraged by three consecutive days of relatively normal and boring price action in US stocks, a sharp contrast to the last few weeks,” wrote Adam Crisafulli of Vital Knowledge.

Tuesday’s bounce marks the market’s latest attempt at a recovery following weeks of steep losses. The S&P 500 is coming off a six-week losing streak — its longest since 2011. The Dow, meanwhile, has fallen for seven straight weeks, marking its longest weekly slide since 2001. Year to date, the S&P 500 and Dow are down 15.9% and 11.3%, respectively.

Investors were also watching out for retail sales numbers hitting at 8:30 a.m. ET. Those figures will give a clue as to how well the consumer is faring with surging U.S. inflation that has prompted the Federal Reserve to tighten monetary policy.

Inflation concerns have been a mounting headwind for stocks, with some investors worried the economy could ultimately tip into a recession.

“We see clear late-cycle indicators, and while the risk of economic growth contraction or recession has risen steadily through the first four-and-a-half months of this year, we are now beginning to cross over a probability level that makes recession a base case for the end of this year and beginning of next,” Darrell Cronk, president of Wells Fargo Investment Institute wrote in a note Monday.

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