Wall Street Subdued as US Regional Bank Rally Loses Steam

New York, NY – The US stock market opened lower on Monday as the recent rally in regional banks lost steam, causing investors to pull back from the financial sector.

The S&P 500 fell 0.4%, while the Dow Jones Industrial Average declined 0.5%. The Nasdaq Composite also slipped 0.4%.

The regional bank rally, which has been fueled by optimism over the economic recovery, had boosted the financial sector in recent weeks. However, concerns over rising inflation and interest rates have caused some investors to become cautious.

Shares of regional banks such as Regions Financial Corp and Fifth Third Bancorp fell by 2.7% and 1.8%, respectively. Meanwhile, major banks such as JPMorgan Chase & Co and Bank of America Corp were also down by around 1%.

The decline in bank stocks was offset somewhat by gains in technology and healthcare stocks. Shares of Amazon.com Inc, Facebook Inc, and Google parent Alphabet Inc all rose by more than 1%.

Investors will be closely watching for any further signs of inflation and the Federal Reserve’s response. Last week, the Labor Department reported that consumer prices rose by 0.8% in April, the biggest increase since 2008.

The Fed has repeatedly stated that it expects inflation to be temporary and that it will maintain its accommodative policy stance for the foreseeable future. However, some investors are concerned that rising inflation could prompt the central bank to tighten policy sooner than expected.

As of midday trading, the S&P 500 was down 0.4%, the Dow Jones Industrial Average was down 0.6%, and the Nasdaq Composite was down 0.2%