Wall Street closed mostly flat on Monday after blockbuster jobs data last week reinforced expectations the Federal Reserve will crack down on inflation, while a revenue warning from chipmaker Nvidia reminded investors of a slowing US economy.
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Stocks retreated from earlier highs as last week's blowout labour market report was initially seen as a sign the economy could withstand aggressive interest rate hikes by the Fed to tame inflation running at four-decade highs.
Investors now await consumer price data on Wednesday to gauge whether the Fed might ease a bit in its inflation fight and provide better footing for the economy to grow.
"The CPI data will help to confirm if the Fed's tightening efforts have been successful in starting to tame inflation or if continued Fed tightening is needed," said Robert Schein, chief investment officer at Blanke Schein Wealth Management.
The Dow Jones Industrial Average rose 29.07 points, or 0.09 per cent, to 32,832.54, while the S&P 500 lost 5.13 points, or 0.12 per cent, to 4,140.06 and the Nasdaq Composite dropped 13.10 points, or 0.1 per cent, to 12,644.46.
Volume on US exchanges was 11.01 billion shares.
The S&P 500 has bounced back 14 per cent from mid-June lows. But signs of inflation running too hot could cement the Fed's case for aggressive monetary policy tightening.
Anthony Saglimbene, chief market strategist at Ameriprise in Troy, Michigan, said the market was due to pull back at some point as traders test the recent rebound.
"Maybe we can get a little bit higher by year end, but that's if everything lines up perfectly," he said, adding that the University of Michigan's preliminary consumer sentiment survey for August on Friday also will be closely watched.
"That's the tug of war between these data sets that tell the story about, 'Hey, are we going to turn into a recession or avoid one?'"
US rate futures have priced in a 67.5 per cent chance of a 75-basis-point hike at the Fed's next meeting in September, up from about 41 per cent before the labour market data beat market expectations.
The information technology sector fell 0.9 per cent as chipmaker Nvidia Corp slid 6.3 per cent after the company said it expects second-quarter revenue to decline 19 per cent from the prior quarter to about $6.7 billion, due to weakness in gaming.
The Philadelphia SE Semiconductor index slid 1.6 per cent, while value stocks rose 0.1 per cent to outpace a 0.4 per cent drop in growth.
Tesla rose 0.8 per cent as the US electric-car maker signed contracts worth about $5 billion to buy battery materials from nickel processing companies in Indonesia, according to a CNBC report.
Shares of US automakers jumped after the US Senate on Sunday passed a $430 billion bill to fight climate change that created a $4,000 tax credit for used electric vehicles and provides billions in funding for their production.
Rivian Automotive Inc rose 6.78 per cent, Ford Motor Co gained 3.14 per cent, General Motors Co added 4.16 per cent and Lordstown Motors Corp advanced 3.17 per cent.
Signify Health Inc shot up 11.0 per cent on a media report that CVS Health Corp was looking to buy the health technology company.
Palantir Technologies Inc dropped 14.2 per cent after the data analytics software company lowered its annual revenue forecast as the timing of some large government contracts remained uncertain.
Tyson Foods Inc fell 8.4 per cent after missing quarterly profit expectations.
Advancing issues outnumbered declining ones on the NYSE by a 2.28-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favoured advancers.
The S&P 500 posted eight new 52-week highs and 29 new lows; the Nasdaq Composite recorded 104 new highs and 27 new lows.
Australian Associated Press
