FX.co ★ Stock market trades lower due to new restrictions amid global Covid19 surge

The US stock market fell on Friday after hawkish remarks from the Fed officials and growing concerns that a fresh wave of the pandemic in Europe could trigger new restrictions.

Shares of economically sensitive companies in energy, financial and industrial sectors declined, while the high-tech Nasdaq 100 index surpassed major indicators. The Treasury yield curve flattened after two Fed officials said the regulator might have to increase the pace of reduction in asset purchases amid strong economic growth and rising inflation. Against this backdrop, the US dollar has posted gains.

The S&P500 closed the session on Friday with a strong decline:

While stocks are hovering around recent highs on positive earnings reports, a resurgence of the pandemic could stall economic recovery just when inflation is raging. Austria has become the first country in Western Europe to impose extensive restrictions. In some parts of Germany, minor businesses have been closed, while the Netherlands has already ordered early closure of shops and bars.

Callie Cox, senior investment strategist at Ally Invest, said, "It's been another week of stocks defying gravity in a tense environment. The road hasn't been easy, though. Investors are still digesting the risk of runaway inflation, along with a Covid spike and a new wave of restrictions in Europe."

On Friday morning, the US House of Representatives passed Joe Biden's bill aimed at expanding the social safety net and fighting climate change. Speaker Nancy Pelosi united fractious Democrats to send the legislation to the Senate, where its fate remains uncertain.

Today traders should pay attention to the following events:

- Canada's Wholesale Sales;

-US Existing Home Sales.