A Wall Street sign is pictured outside the New York Stock Exchange amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., April 16, 2021.
A Wall Street sign is pictured outside the New York Stock Exchange amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., April 16, 2021. Reuters / Carlo Allegri

Wall Street slid on Monday as investors began the holiday-shortened week with a flight to safety, as rising bond yields weighed on market-leading growth stocks ahead of crucial inflation data.

All three major U.S. stock indexes were red, with tech and tech-adjacent stocks pulling the Nasdaq down the most.

"Growth stocks are the most impacted by yield moves," said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York, who added that they tend to "do very well in an economic slowdown."

"Value is clearly winning right now but that doesn't it mean it will for the rest of the year," Pursche said.

GRAPHIC - Growth stocks vs the 10-year Treasury yield

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The benchmark 10-year U.S. Treasury yield hovered near a three-year high ahead of key inflation data expected on Tuesday. [US/]

The U.S. Federal Reserve has vowed to aggressively tackle scorching inflation, and market participants largely expect a series of 50-basis-point interest rate hikes from the central bank in the coming months.

"The concern is that the Fed is going to induce a recession," Pursche said.

The Labor Department's CPI report expected on Tuesday for any sign the inflation wave has crested. Analysts expect the report will show an 8.5% year-on-year growth in consumer prices, the hottest reading since 1981.

Ongoing geopolitical strife also helped dampen investor risk appetite.

Ukraine said it expected Russia to launch a huge new offensive soon as the most serious conflict in Europe since the Balkan wars of the 1990s wore on, despite ongoing peace negotiations.

The Dow Jones Industrial Average fell 225.11 points, or 0.65%, to 34,496.01, the S&P 500 lost 54.57 points, or 1.22%, to 4,433.71 and the Nasdaq Composite dropped 222.84 points, or 1.63%, to 13,488.15.

Of the 11 major sectors in the S&P 500, all but industrials were in the red, with energy shares suffering the biggest percentage loss.

First-quarter earnings season bursts through the starting gate later this week, with big banks leading the way.

Analysts have curbed their first-quarter optimism. On aggregate, annual S&P 500 earnings growth is estimated to be 6.1%, down from 7.5% at the beginning of the year.

Twitter Inc advanced 2.4% after its biggest shareholder, Tesla Inc Chairman Elon Musk rejected the social media company's offer to join its board of directors.

As for Tesla, data showed sales of its electric vehicles plunged in China last month due to that country's efforts to curb COVID-19 outbreaks, sending its shares down 3.7%.

Media and streaming firm Warner Bros Discovery Inc, formed from the $43 billion merger of Discovery Inc and assets of AT&T Inc, oscillated in its first day of trading, and was last down 2.6%.

Nvidia Corp plunged 5.5% after Baird downgraded the chipmaker's stock to "neutral" from "outperform," citing order cancellations and potential demand slowdown.

Falling crude prices helped keep commercial air carriers aloft. The S&P 1500 Airline index rose 2.9%. [O/R]

Chinese regulators approved its first gaming license since July of last year, boosting U.S.-listed shares of DouYu International Holdings, Huya, NetEase Inc and Bilibili by between 3% and 10%.

Declining issues outnumbered advancing ones on the NYSE by a 2.11-to-1 ratio; on Nasdaq, a 2.01-to-1 ratio favored decliners.

The S&P 500 posted 34 new 52-week highs and nine new lows; the Nasdaq Composite recorded 29 new highs and 284 new lows.