Investors eye stock pullback as bonds sound alarm on growth, Delta variant

Stocks are still near their record highs, and investors have been well-rewarded for buying dips during the S&P 500’s roughly 90% climb from its March 2020 lows. Still, some believe that worries over the spread of the Covid-19 Delta variant could give investors an excuse to take profits and spark a pullback.

NEW YORK: The United States bond market has been sounding an alarm over the direction of the economy for weeks, and some investors are wondering whether stocks will follow suit as markets approach a late summer period that has historically been marked by volatility.

The benchmark S&P 500 index was down around 2% on Monday, with cyclical sectors such as energy stocks falling nearly 4.5%. At the same time, a flight to safety in the wake of growing expectations that the US economic rebound will slow in the second half pushed 10-year treasury yields, which move inversely to prices, to a five-month low of 1.18%.