The S&P 500 closes lower on Monday, retreating from record, as rally pauses: Live updates

The S&P 500 slipped on Monday as the broad market index retreated from its record notched last Friday and investors awaited key inflation data.

The Dow Jones Industrial Average slipped 62.30 points, or 0.16% to close at 39,069.23. The S&P 500 fell 0.38% to 5,069.53. The Nasdaq Composite declined 0.13% to close at 15,976.25.

Amazon joined the 30-stock Dow on Monday, replacing Walgreens Boots Alliance. The Dow’s holdings are weighted according to stock price, not market cap. The addition of the e-commerce giant will increase the index’s exposure to tech and consumer retail. Amazon shares inched lower by 0.15%.

Treasury yields climbed higher Monday, providing another dent to the equity market. The 10-year Treasury yield was last higher by about a basis point to 4.276%.

Stocks are entering this week on a high note after the major indexes registered winning weeks with help from Nvidia’s blockbuster earnings. The S&P 500 and the Dow hit record highs on Friday.

Investors are now watching whether the AI momentum can last as economic and inflation risks linger. With that in mind, they’re also looking ahead to the monthly personal consumption expenditures price index, the Fed’s favored inflation gauge due out Thursday.

For the time being, the AI-powered rally appears sustainable, according to Alex McGrath, chief investment officer at NorthEnd Private Wealth.

“Where Nvidia and a lot of other semiconductor companies guided to seems to have put some credence into the thought that AI can continue to power this rally,” said McGrath.

Investor sentiment toward stocks has risen thanks to a better-than-expected earnings season, according to Oppenheimer chief investment strategist John Stoltzfus. This comes “even as markets have had to digest the likelihood that the Federal Reserve will remain highly vigilant regarding sticky inflation when it comes to considering if, when, and by how much it might cut interest rates this year,” he said.

New home sales in January came in below economists’ estimates as mortgage interest rates remained elevated. Sales of new single-family homes came in at 661,000 for the month, an increase of 1.5%, according to seasonally adjusted numbers the Census Bureau and Department of Housing and Urban Development released Monday. The total missed the Dow Jones estimate for 680,000 and 2.4%, respectively.

There’s a raft of economic releases on deck, including January durable orders data on Tuesday and January wholesale inventories on Wednesday. Consumer spending and PCE numbers will come out on Thursday.