By Stephen Culp
NEW YORK (Reuters) -U.S. stocks were essentially unchanged at the close of a choppy session on Monday, with a solar eclipse offering distraction ahead of crucial inflation data and the kick-off of first-quarter earnings season.
The S&P 500 and the Dow posted minimal losses while the Nasdaq ended nominally higher. All three were held in check by the highest benchmark U.S. Treasury yields since November in the wake of Friday's blowout employment report.
That report heightened chances that the Federal Reserve could delay implementing its first interest rate cut at its monthly Federal Open Market Committee meetings longer than previously expected.
"Wall Street is adjusting expectations to reflect the fact that the Fed could be slower to lower interest rates and that now the greatest likelihood is for a rate cut to occur at the July FOMC meeting, rather than June," said Sam Stovall, chief investment strategist of CFRA Research in New York.
On Wednesday, the Labor Department's March Consumer Price Index (CPI) report is expected to show a slight cooldown in monthly price growth and a nominal decrease in the annual core number, which excludes volatile food and energy items.
"It's probably a better day to watch the eclipse than it is to trade stocks," said Jay Hatfield, CEO and portfolio manager at InfraCap in New York. "I don't think anybody wants to really reposition one way or the other ahead of CPI."
Year-on-year headline CPI is expected to gain some heat, rising to 3.4% from 3.2% in February, underscoring inflation's meandering journey back to the Fed's 2% annual target.
Federal Reserve Bank of Chicago President Austan Goolsbee said on Monday the central bank must take into consideration how long it can maintain its restrictive policy without damaging the economy.
"When I heard (Goolsbee) was speaking at one, I was relieved because I know he's a dove," Hatfield added. "So, there was no need to worry about the market melting down while everyone is looking at the sun."
The first-quarter reporting season officially kicks off on Friday with numbers from major U.S. banks JPMorgan Chase & Co (NYSE:JPM), Citigroup Inc (NYSE:C) and Wells Fargo (NYSE:WFC) & Co.
As of Friday, analysts expect aggregated S&P 500 earnings growth of 5.0% year-on-year, down from the 7.2% annual estimate at the beginning of the quarter, according to LSEG.
The Dow Jones Industrial Average fell 11.24 points, or 0.03%, to 38,892.80. The S&P 500 lost 1.95 points, or 0.04%, at 5,202.39 and the Nasdaq Composite added 5.44 points, or 0.03%, at 16,253.96.
Of the 11 major sectors of the S&P 500, six closed lower, with energy shares suffering the largest percentage loss.
Real estate notched the biggest advance.
Tesla (NASDAQ:TSLA) provided a boost, rising 4.9% after CEO Elon Musk said the company would unveil its self-driving Robotaxi on Aug. 8.
Cryptocurrency-related stocks also outperformed, tracking rising bitcoin prices. Exchange operator Coinbase (NASDAQ:COIN) Global, and software firm MicroStrategy rose 6.7% and 5.1%, respectively.
Advancing issues outnumbered decliners on the NYSE by a 1.57-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favored advancers.
The S&P 500 posted 22 new 52-week highs and two new lows; the Nasdaq Composite recorded 79 new highs and 84 new lows.
Volume on U.S. exchanges was 9.50 billion shares, compared with the 11.53 billion average for the full session over the last 20 trading days.