- The Dow, S&P and Nasdaq all closed lower on Wednesday after financials dropped 0.8 percent.
- Financials were pressured by concerns that U.S. inflation wasn't increasing fast enough.
- Still, the Nasdaq notched its seventh straight monthly gain.
U.S. equities fell on Wednesday, the last trading day of May, as a drop in the financials sector pressured stocks.
The Dow Jones industrial average fell about 20 points, with Goldman Sachs contributing the most losses. The S&P 500 fell 0.05 percent, with financials falling 0.8 percent to lead decliners.
The Nasdaq composite dropped 0.1 percent.
"A lot of people assumed they'd raise in June and September, but now I'm hearing it may be June and December. A lot of things are getting pushed back," Thomas said. Also, "Treasurys are suggesting a much different environment" than stocks.
Treasury yields have fallen sharply from where they began trading in 2017. On Wednesday, the benchmark 10-year yield hovered near 2.19 percent; it began the year near 2.5 percent.
Komal Sri-Kumar, president of Sri-Kumar Global Strategies, said the pullback in equities on Wednesday and Tuesday is reflective of "a confluence of unfavorable factors."
"There is little indication that the US economy will reach its 3% growth this year, reform of health care and taxes remains a dream, and there are no projects as destinations to accept a surge in infrastructure spending," he said. "Inflation figures continue to run well below the Fed's targets as we found out earlier this week."
Also raising concerns about inflation was the Fed's Beige Book — a summary of economic conditions in the U.S. by Federal Reserve district — which
Nevertheless, the Dow,
"We're getting to the point where money keeps chasing money," said Quincy Krosby, chief market strategist at Prudential Financial. "You have technology doing well, but you also have utilities doing well."
Companies in the utility sector sell essentials such as electricity and
"What's interesting about this market is this is all happening amid a backdrop of uncertainty around the Trump agenda," said Prudential's Krosby.
The prospects for the Trump administration implementing pro-growth policies —such as tax reform,
Trump returned from his first trip overseas to deal with the fallout from reports that Jared Kushner, his son-in-law and a top adviser, discussed the potential to set up a "secret and secure communications channel" between the Trump transition team and the Kremlin.
Multiple news organizations also reported Wednesday Trump was expected to pull out of the Paris climate agreement. In a tweet, Trump said he would announce his decision on the accord "over the next few days."
"The longer the [Trump] agenda drags out, the more it will have a negative impact on the market," said Jeff Carbone, managing partner of Cornerstone Financial Partners.
The Dow Jones industrial average declined 20.82 points, or 0.1 percent, to close at 21,008.65, with Goldman Sachs leading decliners and Pfizer outperfoming.
The dipped 1.11 points, or 0.05 percent, to end at 2,411.80, with financials leading four sectors lower and utilities the best performer.
The Nasdaq pulled back 4.67 points, or 0.08 percent, to close at 6,198.52.
Advancers and decliners were about even at the New York Stock Exchange, with an exchange volume of 1.449 billion and a composite volume of 4.497 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 10.4.
On tap this week:
7:30 p.m. San Francisco Fed President John Williams
May vehicle sales
8:15 a.m. ADP employment
8:30 a.m. Initial claims
8:30 a.m. Productivity and costs
9:45 a.m. Manufacturing PMI
10:00 a.m. ISM manufacturing
10:00 a.m. Construction spending
8:30 a.m. Employment
8:30 a.m. International trade