Stocks pull back from record highs on signs of manufacturing revival
The large-cap indexes pulled back from record highs, as U.S. Treasury yields increased in response to signs that the manufacturing sector might finally be gaining traction. The market’s performance also narrowed again, with growth stocks faring better than value shares and large-caps falling less than small-caps. Energy stocks outperformed as oil prices reached their highest level since October on worries over rising tensions between Israel and Iran and a decision by major exporters to maintain production limits despite tight markets. Some late strength in Microsoft also boosted the technology sector. The Institute for Supply Management’s (ISM’s) separate indexes of service and manufacturing sector activity seemed to play a particular role in driving sentiment over the week. Stocks moved lower following the release of the March ISM manufacturing reading on Monday, which came in well above expectations and indicated expansion—if barely—for the first time in 16 months. More concerningly from an inflation perspective, the ISM prices paid index also surprised handily on the upside, seemingly confirming recent data showing a rebound in input prices.
