Wall St eases as investors await inflation data

By Bansari Mayur Kamdar and Shashwat Chauhan

(Reuters) -Wall Street's main stock indexes slipped on Monday, as investors awaited key inflation data this week that could offer clues about the U.S. Federal Reserve's monetary policy path following last week's mixed jobs report.

All three major U.S. stock indexes had ended the week lower on Friday, with the S&P 500 and the Nasdaq coming off record highs as high-flying chip stocks fell and a labor market report showed more new jobs than expected, while the unemployment rate rose unexpectedly.

The mixed report bolstered bets of the Fed cutting interest rates in June. Friday's data even prompted some traders to bet on a May rate cut. 

This week's February data, including consumer prices (CPI), will provide more cues on whether inflation has eased enough for policymakers to lower borrowing costs in the coming months.

"The markets are realizing that we are a bit vulnerable to a correction catalyst," said Sam Stovall, chief investment strategist at CFRA Research, adding that people are booking the profits they can before the CPI numbers.

"The core (inflation) we still see coming down, which would be a positive... the markets could actually be favorably surprised tomorrow."

Sticky inflation data for January and signs of a robust economy halted the AI-led rally last month, leading traders to push back bets on the timing of the first interest-rate cut to June from March.

Federal Reserve officials are in a media blackout ahead of their latest rate-setting meeting next week.

At 11:16 a.m. ET, the Dow Jones Industrial Average was down 137.47 points, or 0.36%, at 38,585.22, the S&P 500 was down 19.31 points, or 0.38%, at 5,104.38, and the Nasdaq Composite was down 53.22 points, or 0.33%, at 16,031.89.

Industrial stocks led losses across the major S&P 500 sectors, while rate-sensitive tech stocks fell 0.4%.

Meta Platforms shed 4%, leading losses among megacap growth and technology peers.

AI-darling Nvidia slipped 0.4% in volatile trading, following a 5.5% drop on Friday.

Chip peers Advanced Micro Devices and Broadcom slid close to 3% each, while the Philadelphia Semiconductor Index lost 1.5%.

Boeing fell 3.6% after Alaska Airlines said on Saturday it was cooperating with the U.S. Department of Justice in a criminal investigation into a Boeing 737 MAX blowout on one of its flights in January.

Some cryptocurrency and blockchain-related firms, such as Coinbase Global and Microstrategy <MSTR.O>, climbed 4.3% and 11.9%, respectively, as bitcoin hit a fresh record high.

Equitrans Midstream added 2.6% after EQT Corp said on Monday it had decided to buy back its former unit in an all-stock deal. EQT shares slid 7.8%.

Drugmaker Eli Lilly fell 4.1%, extending its losses from Friday and weighing on the healthcare sector.

The 2024 U.S. presidential election is also coming into focus, with investors bracing for a likely rematch between President Joe Biden and former President Donald Trump.

Declining issues outnumbered advancers for a 1.60-to-1 ratio on the NYSE and a 1.44-to-1 ratio on the Nasdaq.

The S&P index recorded 12 new 52-week highs and no new lows, while the Nasdaq recorded 41 new highs and 46 new lows.

(Reporting by Bansari Mayur Kamdar and Shashwat Chauhan in Bengaluru; Editing by Rashmi Aich and Pooja Desai)