Wall Street retreats with data, Fed comments in focus

Wall Street's main indexes are edging lower as investors await fresh economic data and comments from Federal Reserve officials throughout the week for more clarity on monetary policy.

Keeping a lid on losses were megacaps Apple and Microsoft with gains of 0.3 per cent and 0.9 per cent, respectively. AI chip leader Nvidia advanced one per cent to hit a fresh record high.

Other chip stocks also rose, sending the Philadelphia SE Semiconductor index to an all-time high. Broadcom and US-listed shares of Taiwan Semiconductor Manufacturing Co were up around three per cent each, while Micron Technology jumped two per cent after price-target raises by brokerages.

Autodesk jumped 4.5 per cent after a report that activist investor Starboard Value had bought a roughly $US500 million ($A757 million) stake in the software maker.

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Technology was the biggest gainer among the 11 S&P 500 sector indexes.

The blue-chip Dow was the only major index to post weekly declines on Friday, while the Nasdaq notched its fifth consecutive record closing high. The S&P 500 hit multiple all-time peaks in the previous week.

Some investors, however, are concerned about the sustainability of the equity rally as megacap growth and technology stocks were behind most of Wall Street's gains this year.

"There really isn't an appetite to be a real seller right now because there is a perception that momentum is going to continue, and stocks are going to continue winning," said Daniela Hathorn, senior market analyst at Capital.com.

"The fact that the rally has been driven mostly by a select few stocks, that would mean that the pullback could be even deeper."

Goldman Sachs still raised its 2024 year-end target for the S&P 500 Index to 5600 from 5200 earlier, representing an about 3.2 per cent upside to current levels.

Markets are also keeping a close eye on upcoming comments from the New York Fed's John Williams, Philadelphia Fed's Patrick Harker and Fed Board Governor Lisa Cook.

Data showed the New York Fed's Empire State Current Business Conditions index slipped less than expected, while the index of prices paid softened slightly.

On the economic roster for the rest of the week are May retail sales data on Tuesday, with industrial production, housing starts and S&P flash PMI data among other key releases due later in the week.

Recent hawkish projections from the Federal Reserve have somewhat contrasted several data releases pointing to growing weakness in the economy. The central bank dialed back their projections for three rate cuts in 2024 to just one on Wednesday.

However, markets still expect about two 25-basis-point cuts this year, according to LSEG data. The CME FedWatch tool shows easing is still seen beginning at the September meeting.

In early trading on Monday, the Dow Jones Industrial Average was down 91.66 points, or 0.24 per cent, at 38,497.50, the S&P 500 was down 5.63 points, or 0.10 per cent, at 5,425.97, and the Nasdaq Composite was down 17.42 points, or 0.10 per cent, at 17,671.46.

A shorter trading week is on deck as markets will be closed on Wednesday.

Declining issues outnumbered advancers for a 1.73-to-1 ratio on the NYSE and for a 1.55-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and four new lows, while the Nasdaq recorded 20 new highs and 82 new lows.