By Johann M Cherian and Purvi Agarwal
(Reuters) -Wall Street's main indexes were mixed on Monday as investors paused after a rally in the previous week and exercised caution ahead of numerous job reports and comments through the week from Federal Reserve policymakers, including Chair Jerome Powell.
At 9:47 a.m. the Dow Jones Industrial Average fell 226.69 points, or 0.54%, to 42,086.31, the S&P 500 lost 4.52 points, or 0.08%, to 5,733.65 and the Nasdaq Composite gained 44.41 points, or 0.25%, to 18,164.00.
Eight of the 11 S&P 500 sectors were lower. Materials was at the bottom with a 0.8% decline after logging its best week since early December on Friday.
The Dow closed at a record high on Friday, and the S&P 500 hovered near its own milestone. Both indexes are set for their fifth straight month of gains, defying a historical trend where September has been a weak month for equities on average.
The three main indexes are set for a quarterly rise, after the Fed kicked off its policy easing nearly two weeks ago, fuelling gains on Wall Street.
Recent data has supported the trend of moderating price pressures and an overall resilient economy, granting the Fed enough room to support the labor market and avoid a recession by reducing borrowing costs further.
Economists say that a mistake in setting interest rates during the last phase of the Fed's inflation battle could be risky for the economy over the next year as markets await comments from chair Powell at a conference on Monday at 1:55 p.m. ET.
August's job openings report and September's pivotal payrolls figure, along with final business activity estimates are on the radar this week that could offer clues on the outlook for the economy and rate cuts.
"If we start to see a greater-than-expected slowdown in the jobs market, the forecast for the November Fed meeting could show a greater likelihood of a 50 bps cut," said Sam Stovall, chief investment strategist at CFRA Research.
Traders are now pricing in 62.9% chances of a 25 bps reduction, as per the CME Group's (NASDAQ:CME) FedWatch Tool. Those for a bigger 50 basis points cut stand at 37.1%, down from 53% last week.
CVS Health (NYSE:CVS) rose 3.3% after a report showed hedge fund Glenview Capital Management will meet top executives at the struggling healthcare company.
Automakers Ford (NYSE:F) dropped 2.2% and General Motors (NYSE:GM) lost 3% after European peer Stellantis NV (NYSE:STLA) slashed its annual forecasts.
U.S.-listed shares of Alibaba (NYSE:BABA) rose 3.5%, Li Auto (NASDAQ:LI) jumped 6% and PDD climbed 3.3% after China's central bank, in its latest stimulus move, said it would tell banks to lower mortgage rates for existing home loans.
Freeport-MacMoRan dipped 2.2% after a rating downgrade from Scotiabank, weighing on the materials sector.
Markets also kept an eye on a worker union's port strike on the East Coast and the Gulf of Mexico that could cause delays and snarl supply chains.
Declining issues outnumbered advancers by a 1.45-to-1 ratio on the NYSE and by a 1.23-to-1 ratio on the Nasdaq.
The S&P 500 posted 13 new 52-week highs and two new lows, while the Nasdaq Composite recorded 36 new highs and 29 new lows.