U.S. stocks remained under pressure on Thursday after fresh data indicated further recovery in the labor market.
The S&P 500 fell 0.8%, while the Nasdaq Composite shed 1.2% a day after the tech-heavy benchmark retreated almost 1.7% a day earlier. The Dow Jones Industrial Average was also down, falling almost 300 points.
Investors’ optimism has been muted in recent days by mixed signals from different parts of the economy. The government’s Covid-19 relief spending and the rollout of vaccines is helping spur economic growth. That has led to a surge in consumers’ demand for products.
But there are signs that the global rebound may be slowed by an extension of Covid-19 lockdowns and growing constraints in the supply chain for crucial products such as vaccines and electronic chips. Fresh stimulus checks have also prompted concerns that inflation will rise sharply as the economy recovers, which has curbed appetite for both government bonds and technology stocks.
“From here, you could have in aggregate flattening markets. We’re going to be looking for a new narrative,” Daniel Morris, chief market strategist at BNP Paribas Asset Management. “Growth could recover, value could wait, and then on the surface nothing happens. I have modest expectations for the market until we get a sense of what the next catalyst is.”