By Lisa Pauline Mattackal and Ankika Biswas
(Reuters) -Chip stocks boosted the Nasdaq on Monday, while the S&P 500 and the Dow edged lower as investors awaited a key inflation reading, commentary from Federal Reserve Chair Jerome Powell and the start of corporate earnings season for monetary policy cues.
Nvidia (NASDAQ:NVDA), Intel (NASDAQ:INTC), Marvell Technology (NASDAQ:MRVL), Advanced Micro Devices (NASDAQ:AMD) and Qualcomm (NASDAQ:QCOM) jumped between 0.8% and 4.6%.
The gains lifted the Philadelphia SE Semiconductor Index 1.5%, to a near three-week high, and helped the S&P 500 and the Nasdaq open at fresh intraday record highs, after closing at fresh record peaks on Friday.
On the economic front, consumer price index data due on Thursday and producer price index data expected on Friday will be under the scanner to gauge if price pressures are easing.
"The economic picture has weakened further, but not enough yet to freak everybody out that it's going to morph into a hard landing," said Mike Wilson, chief equity strategist at Morgan Stanley (NYSE:MS).
"But if it doesn't improve or doesn't stabilize, there's going to be a crossover point where bad economic data is all of a sudden bad for the stock market."
Expectations for interest-rate cuts as early as September were boosted after Friday's nonfarm payrolls report showed U.S. job growth slowed in June - the latest data to point to weakness in labor market conditions.
Traders now see a nearly 74% chance of a 25-basis-point cut in September, up from last week's 60%, according to CME's FedWatch.
Megacaps including Alphabet (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN) Meta (NASDAQ:META) Platforms, and Apple (NASDAQ:AAPL) retreated after Friday's rally, shedding between 0.2% and 1.5% on the day.
The Dow slipped off a more than one-month high, dragged by losses in Salesforce and Microsoft (NASDAQ:MSFT).
Major banks including Citigroup, JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) are slated to kick off the second-quarter earnings season on Friday. Citigroup shares gained 0.9%, while Wells Fargo lost 0.9%.
The S&P 500 Information Technology Index was the top sectoral gainer, while Communication Services was the biggest laggard. The small-cap Russell 2000 gained 0.6%.
Investors are also looking ahead to earnings to see if a sharp rally in a handful of megacap stocks such as Nvidia justifies their pricey valuations.
Markets will also watch Powell's semi-annual testimony before U.S. Senate and House committees on July 9 and 10 closely.
At 12:16 a.m. ET, the Dow Jones Industrial Average was down 82.22 points, or 0.21%, at 39,293.65, the S&P 500 was down 2.57 points, or 0.05%, at 5,564.62, and the Nasdaq Composite was up 28.98 points, or 0.16%, at 18,381.74.
Paramount Global (NASDAQ:PARA) reversed its premarket course and fell 3% after Sunday's announcement of a merger with Skydance Media.
Planemaker Boeing (NYSE:BA) gained 0.8% after agreeing to plead guilty to a criminal fraud conspiracy charge and a fine of $243.6 million, to resolve a U.S. Justice Department investigation into two fatal 737 MAX crashes.
Advancing issues outnumbered decliners by a 1.13-to-1 ratio on the NYSE, and by a 1.34-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and six new lows, while the Nasdaq recorded 66 new highs and 81 new lows.