>> U.S. stocks had another rough and tumble session Monday. Stocks extending losses from Friday's massive sell off, the Dow's biggest daily drop since June of 2016. Reuters reporter, Louis Krauskopf explains what's causing these spasms in the market.>> There are two issues that have been a catalyst for this pullback and they're related, rising bond yields and concerns about rising inflation.
Rising bond yield is an issue for stocks for a few reasons, higher borrowing costs for companies. If bonds become relatively more attractive, that that could also pull people away from stocks. If rising inflation starts to get out of control, that's where you could see the Federal Reserve start to step in and increase rates, perhaps at a faster pace than investors have been bracing for.
>> Some analysts are worried that this market drop could be the start of something bigger.>> Something that investors have been waiting for to get the sort of froth out of this market. People have been waiting for a steep pullback. This is a market that is just not used to pull backs of more than 1%.
Even that's been an aberration over the last year, year and a half. So the fact that we have had this pullback of around 4% could spook some investors who have gotten in, and are worried about a deeper draw down.>> The financial sector the hardest hit, with Wells Fargo, Berkshire Hathaway, and Bank of America among the biggest losers, while bond yields continued to rise.
Still, more optimistic experts are brushing it off, saying the latest declines are still modest compared what the stock market's hefty gains in recent months.