The S&P 500 closed up slightly after Monday's choppy trading as investors anxiously awaited a raft of technology company earnings, a Federal Reserve policy decision on interest-rate cuts and key US labor data, all due this week.
Quarterly reports from market heavyweights such as Microsoft and Apple, Meta and Amazon.com this week will offer clues on whether technology sector stocks are vulnerable or can extend their recent rallies.
Investors are hoping that the Fed will end its meeting on Wednesday with a signal that it is preparing for a September rate cut in its policy verdict.
On Friday investors will closely monitor the July non-farm payrolls report for signs of possible weakening in the labor market.
"Understandably we're wavering," said Mona Mahajan, principal and senior investment strategist at Edward Jones, pointing to the upcoming catalysts and Wall Street's Friday advance.
"Markets are largely in wait-and-see mode. We have big economic news this week, both the Fed meeting Wednesday and the jobs report on Friday. We also have huge earnings reports coming out of mega cap technology," she said.
Technology megacaps have dominated Wall Street's record-breaking run, prompting investors to recently turn their attention to laggards such as mid- and small caps, which are expected to benefit from a low-interest-rate environment.
"A lot of investors are keen to see whether the recent rotation we've been seeing in the markets has legs, or does mega cap technology really kind of shine through in its earnings reports," Mahajan added.
However, on Monday, the small-cap Russell 2000 lost ground after three straight weeks of gains.
Based on the latest available data, the Dow Jones Industrial Average fell 49.21 points, or 0.12%, to 40,540.13, the S&P 500 gained 4.5 points, or 0.08%, to 5,463.6 and the Nasdaq Composite added 12.32 points, or 0.07%, to 17,370.20.
Among the S&P 500's 11 major industry sector indexes consumer discretionary was boosted by Tesla as the electric vehicle maker's stock rallied after Morgan Stanley added it to its "top pick" U.S. autos' list.
McDonald's shares rose after it said its $5-meal deal, launched late in June, was popular among customers shying away from higher-price items. As a result the fast food giant reported a surprise drop in sales, its first in 13 quarters.
Abbott Laboratories shares were under pressure after a jury ordered the healthcare company to pay $495 million in damages following a trial that found its formula for premature infants had caused a dangerous illness.
Crypto stock trading was also choppy with Coinbase Global , Riot Platforms and Marathon Digital shares falling sharply after an initial jump when bitcoin prices earlier hit seven-week highs.
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