Wall Street closed sharply lower on Tuesday with all three major indices posting declines for the first time in days, as inflation fears returned to the market.
The losses hit every sector after the 10-year US Treasury note moved back above three percent and oil prices moved higher, which combined to sap investor optimism of recent days.
The key Dow Jones Industrial Average dropped 0.78 percent to close at 24,706.41, its first loss in nine days although it ended slightly above the low point of the day.
The broader S&P 500 also recovered some ground by the close, but lost 0.68 percent to end the session at 2,711.45, while the tech-dominant Nasdaq dropped 0.8 percent to 7,351.62.
In addition to the upward move in the Treasury rate, the New York Federal Reserve Bank’s survey of business conditions showed a big jump in the price index.
That reignited investor concern that inflation will accelerate, causing the Fed to be more aggressive about raising interest rates.
In other data, US retail sales slowed in April but still posted a solid gain, despite tepid car sales, while the results for March were stronger than initially reported. That bodes well for GDP growth in the second quarter but also adds to the inflation picture.
‘It reflects the continued prospect for Fed rate hikes and improved economic growth in the second quarter,’ Karl Haeling of LBBW said.
He noted that the Treasury yield of 3.05 percent means ‘we reached a technical level not reached since 2011,’ which means ‘equity investors are paying more attention to Treasuries.’
Maris Ogg, Tower Bridge Advisors, said the strong run up in share prices in the past few days, and the bull market of the last 18 months – which hit its peak in late January – mean the market was likely due for a retreat.
‘The fact is we are in a transition period: the market is reacting about the inflation, how far the Fed is going to go, what is going to happen. that is all pretty understandable, especially after the strong run we’ve had.’
Shares of hardware chain Home Depot fell 1.6 percent to $187.98 after the earnings report showed revenues and same-store sales missed estimates.
And Apple lost nearly one percent, delaying the tech company’s march towards $1 trillion in value.
Automaker Ford gained 0.4 percent, but electric car company Tesla shed 2.7 percent after another serious, though non-lethal, accident was reported involving one of its cars.
Cybersecurity company Symantec bucked the trend to regain 4.35 percent after announcing that the early stages of its internal probe indicate its past financial statements will not have to be revised. 
The company lost more than a third of its value Friday after its audit committee launched and internal investigation contacted the Securities and Exchange Commission.