US close: Stocks slip after last week's fresh highs

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US stocks fell modestly on Monday, easing from record highs reached last week.

The Dow Jones Industrial Average decreased 0.41%, closing at 39,313.64, while the S&P 500 and Nasdaq Composite followed a similar trend, dropping 0.31% and 0.27% respectively, to end at 5,218.19 and 16,384.47.

In currency markets, the dollar was last 0.03% weaker on sterling, trading at 79.12p, while it strengthened 0.01% against the euro to 92.28 euro cents.

The greenback meanwhile exhibited a slight weakening against the yen, slipping 0.02% to change hands at JPY 151.39.

“US stocks traded cautiously on Monday as the holiday-shortened week began, with investors hesitating to increase their risk exposure ahead of critical inflation data,” said SPI Asset Management managing partner Stephen Innes.

“Although all three major US indices recovered from their intraday lows, the overall sentiment remained subdued.

“After a strong performance last week, investors may be taking a hiatus and possibly enjoying the spring break, while others are adopting a wait-and-see approach for the next bullish catalyst, such as a favourable outcome from the Fed's preferred inflation gauge.”

Innes said that in that context, an ‘all-clear’ signal would entail the inflation data meeting consensus expectations or coming in lower than anticipated.

“As we enter the earnings season window, investors are eager to divert attention from the familiar inflation narrative dominating the markets.

“During this period, the default setting typically revolves around whether or not companies will deliver robust earnings growth to justify the S&P 500's valuation, which currently stands at a lofty 21 times earnings.

“Hence, investors typically move into wait-watch mode as they get influenced by the bombardment of bears.”

New home sales dip modestly in February, underlying market still strong

On the economic front, the US housing market showed mixed signals in February.

While sales of new single-family homes unexpectedly declined by 0.3%, revised data for January indicated a stronger-than-expected performance.

The overall trend remained positive, driven by a persistent shortage of existing homes for sale.

Despite the slight February drop, new home sales were still 5.9% higher than the same month last year.

Economists noted that new home sales data can fluctuate monthly, making the longer-term trend a more reliable indicator of housing market health.

Chipmakers face pressure on China concerns

In equities, chipmakers AMD and Intel experienced declines, with AMD losing 0.57%, while Intel was down 1.74% by the close.

The downturn followed a Financial Times report that China was planning to phase out the use of the companies' microprocessors in federal IT systems, favouring domestic alternatives.

Elsewhere, tech giants Apple, Meta and Alphabet saw their share prices slide pending possible fines from European regulators.

Apple declined by 0.83%, Meta by 1.29%, and Alphabet by 0.41%, as concerns centred around potential anti-competitive practices.

On the upside, Boeing shares ascended 1.36% after the company announced that its chairman, CEO and head of commercial airlines would all be stepping down.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Walt Disney Co. (DIS) $119.36 3.01%
Amgen Inc. (AMGN) $280.82 1.68%
Boeing Co. (BA) $191.41 1.36%
Verizon Communications Inc. (VZ) $40.87 1.24%
Merck & Co. Inc. (MRK) $125.31 1.18%
Chevron Corp. (CVX) $156.47 1.17%
Travelers Company Inc. (TRV) $225.53 0.48%
Walgreens Boots Alliance, Inc. (WBA) $20.63 0.24%
American Express Co. (AXP) $225.98 0.03%
Dowdupont Inc. (DWDP) $0.00 0.00%