U.S. stocks fall as technology selloff resumes

U.S. stocks declined and commodities rallied as a global supply crunch and the threat of persistently high inflation kept investors on the edge.

U.S. stocks declined and commodities rallied as a global supply crunch and the threat of persistently high inflation kept investors on the edge.

The S&P 500 fell, with losses stalled near the index’s average price for the past 100 days-- a level the index has held during virtually every selloff in 2021.

Shares of high-growth technology companies led the decline while vaccine makers were also lower after Merck & Co.’s announcement about an effective COVID-19 drug. Energy and materials stocks followed commodities higher as oil surged on OPEC+ agreement to hike output in November.

Global markets have taken a risk-off turn as the post-pandemic recovery stalls on supply shortages in everything from semiconductors to coffee. A spreading energy crunch has added to concern elevated inflation will be longer-lasting than policy makers predict. Risks are multiplying at a time investors are bracing for Federal Reserve tapering as early as next month.

“U.S. equities have come under selling pressure after facing higher rates and signs of a slowdown in economic momentum,” Craig W. Johnson, chief market technician at Piper Sandler & Co., wrote in a note. “We believe rates will grind higher into year-end and perhaps most importantly, we do not expect the recently disruptive rate of change to continue. While the SPX has suffered technical damage from the September shakeout, the long-term secular uptrend remains intact.”

Europe’s energy crisis continued to worsen with power and gas prices surging before the onset of winter. The power contract for November in Germany traded above 200 euros per megawatt-hour, a record. Natural-gas futures also extended a rally.