Stocks retreated on concern that inflation could pose a challenge to the global economic rebound, forcing central banks to raise interest rates sooner than expected.

Traders took some risk off the table as data showed new U.S. home construction slowed down -- suggesting builders are struggling to break ground on projects amid high materials prices and ongoing labor shortages. Target Corp. sank after warning that cost pressures are creeping up, stoking fears that inflation will dent profits at big retailers. Meantime, home-improvement giant Lowe’s Cos. lifted its sales forecast for this year and reported stronger-than-expected revenue.

“While we remain structurally bullish on stocks, we do anticipate a push-and-pull of market dynamics into year-end given inflation concerns, supply-chain pressures, labor shortages, and fiscal uncertainty,” said Andrea Bevis, senior vice president at UBS Private Wealth Management.

Bond traders are bracing for a key test as the Treasury looks to sell its first long-dated debt since inflation worries spooked buyers at last week’s 30-year auction. The widely watched 5-to-30 year yield curve steepened for a fourth day as long-end rates rose heading into the day’s 20-year debt auction, while short-end rates dipped slightly.

Markets could face a rocky time ahead as the global economy seeks to emerge from the abrupt impact of the pandemic, according to Goldman Sachs Group Inc. Chief Executive Officer David Solomon. In case interest rates move up, that “will take some of the exuberance out of certain markets,” he said in an interview at the Bloomberg New Economy Forum in Singapore.

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Some other corporate highlights:

  • Visa Inc. slumped as Inc. will stop accepting purchases made with credit cards issued in the U.K. starting next year.
  • The breathless rally in Rivian Automotive Inc. came to an abrupt halt on Wednesday, wiping out US$16 billion from the newly public electric-truck maker’s valuation.
  • Cassava Sciences Inc. shares dropped following a report that the Securities and Exchange Commission began an investigation of the pharmaceutical company.

Some of the main moves in markets:


  • The S&P 500 fell 0.1 per cent as of 10:52 a.m. New York time
  • The Nasdaq 100 rose 0.2 per cent
  • The Dow Jones Industrial Average fell 0.4 per cent
  • The Stoxx Europe 600 rose 0.2 per cent
  • The MSCI World index fell 0.2 per cent


  • The Bloomberg Dollar Spot Index was little changed
  • The euro fell 0.2 per cent to US$1.1300
  • The British pound rose 0.2 per cent to US$1.3457
  • The Japanese yen rose 0.2 per cent to 114.54 per dollar


  • The yield on 10-year Treasuries was little changed at 1.63 per cent
  • Germany’s 10-year yield was little changed at -0.24 per cent
  • Britain’s 10-year yield declined two basis points to 0.97 per cent


  • West Texas Intermediate crude fell 1.6 per cent to US$79.50 a barrel
  • Gold futures rose 0.6 per cent to US$1,864.80 an ounce