By Chuck Mikolajczak
NEW YORK (Reuters) -U.S. stocks ended with modest losses on Monday, as the focus shifted after last week's AI-fueled rally to upcoming economic data that could affect the timing of the Federal Reserve's expected interest rate cut.
The release of January's personal consumption expenditures price index (PCE)- the Fed's preferred inflation gauge - on Thursday could dampen the recent enthusiasm should the data indicate price pressures are not cooling fast enough.
Markets have all but ruled out a cut at the Fed's March meeting and have recently pushed back expectations for easing to June from May, CME's FedWatch Tool showed, on the heels of surprisingly strong consumer and producer price data.
Reports on durable goods, consumer confidence and manufacturing activity are due later this week.
"It's a lot of position squaring ahead of the big data, investors are just trying to make sure they're not underweight or overweight since trends are not moving," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.
"The jobs report is another week away so eyes are kind of turning Thursday to PCE price index rather than anything else. There is a lot more data this week than last week but it's still not the biggest of the data."
A strong forecast from chip designer Nvidia (NASDAQ:NVDA) last week added to this year's artificial intelligence frenzy, helping to push the Dow and S&P to new highs and the Nasdaq just shy of its November 2021 record, while keeping disappointment over the Fed's delayed rate cut in check.
The Dow Jones Industrial Average fell 62.30 points, or 0.16%, to 39,069.23. The S&P 500 lost 19.27 points, or 0.38%, at 5,069.53 and the Nasdaq Composite lost 20.57 points, or 0.13%, at 15,976.25.
The S&P 500 has gained for 15 of the past 17 weeks - something which has only happened only once in the last 50 years, in 1989, according to Deutsche Bank.
Helping to curb declines on the Nasdaq was a 4.02% gain in Micron Technology (NASDAQ:MU) as it started mass production of its high-bandwidth memory semiconductors for use in Nvidia's latest AI chip.
The Philadelphia semiconductor index rose 1.05%.
Google-parent Alphabet (NASDAQ:GOOGL) stumbled 4.44% after announcing plans to relaunch its AI tool in the next few weeks. It was paused last week after inaccuracies in some historical depictions.
Warren Buffett-led Berkshire Hathaway (NYSE:BRKa) dipped 1.94%, erasing early gains on investor worries after the U.S. government warned of a lawsuit against its power company, PacifiCorp.
Domino's Pizza (NYSE:DPZ) jumped 5.85% after surpassing Wall Street expectations for quarterly same-store sales.
Intuitive Machines plunged 34.62% after the company said its spacecraft had tipped over shortly after touching down on the lunar surface.
Declining issues outnumbered advancers for a 1.6-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by 1.2-to-1 on the Nasdaq.
The S&P index recorded 69 new 52-week highs and one new low, while the Nasdaq recorded 230 new highs and 92 new lows.
Volume on U.S. exchanges was 10.89 billion shares, compared with the 11.66 billion average for the full session over the last 20 trading days.