US close: Stocks slip on Monday ahead of key inflation data and earnings later in the week

At the close, the Dow Jones Industrial Average was down 0.16% at 33,745.40, while the S&P 500 was 0.02% weaker at 4,127.99 and the Nasdaq Composite saw out the session 0.36% softer at 13,850.00.

The Dow closed 55.20 points lower on Monday, cutting into gains recorded in the previous session when the index closed at yet another fresh record.

Market participants will be focussed on corporate earnings throughout the week, with expectations set for mostly positive news thanks to a recovering US economy amid the White House's ongoing Covid-19 vaccine rollout. Some of the country's largest banks, such as Goldman Sachs and JPMorgan Chase, will report results this week.

Comments from Federal Reserve chairman Jerome Powell that central bank wanted to see inflation rise above its 2% for an extended period before officials move to raise interest rates and reports that President Joe Biden, along with other Democrats, was set to meet with a bipartisan group of lawmakers to try to convince Capitol Hill to back his $2.0trn infrastructure package were both also in focus throughout the session on Monday.

On the macro front, March's consumer inflation expectations numbers from the Federal Reserve Bank of New York hit their highest levels last month since March 2014, with the central bank's survey revealing those polled saw inflation at 3.2% in twelve months from now and at 3.1% three years from now, with both readings being a 0.1 percentage point increase from February.

Elsewhere, the White House posted a March budget deficit of $660.0bn, a record high for the month, with direct payments to Americans as a result of Biden's stimulus package being distributed throughout the period, according to the Treasury Department. The deficit for the first six months of the 2021 financial year widened to a record $1.70trn, compared to the $743.0bn deficit posted at the same time a year earlier.

Turning again to the central bank, Federal Reserve Bank of Boston president Eric Rosengren said the labour market could tighten significantly later in the year and 2022 as Covid-19 numbers get under control and more Americans return to work. Rosengren stated that many employers that hold off on hiring now could have to face serious competition for workers later on down the line, with some businesses already raising salaries in order to attract workers for relatively low-wage jobs.

In the corporate space, reopening plays like Carnival, Norwegian Cruise Lines and United Airlines were lower on the day, while Tesla shares picked up about 3.7% after analysts at Canaccord Genuity upgraded the stock to 'buy'.

Nuance Communications shares surged nearly 16% after Microsoft revealed it would be snapping up the speech recognition firm as part of a $16.0bn deal - the tech giant's biggest acquisition since it absorbed LinkedIn for $26.0bn back in 2016.