US equities traded lower on Monday as investors turned cautious ahead of a series of closely watched economic releases and another round of corporate earnings, following a volatile week that ended with the Dow Jones Industrial Average reaching a historic milestone.
The Dow Jones Industrial Average fell 128 points, or about 0.2%, in early trading.
The S&P 500 was also down 0.2%, while the Nasdaq Composite slipped 0.4%, reflecting renewed pressure on technology and growth-oriented stocks.
Mixed moves after sharp rebound
Monday’s declines followed a strong rebound in the prior session, when stocks surged after heavy losses earlier in the week.
On Friday, the Dow jumped about 1,200 points, or roughly 2.5%, to notch its first-ever close above the 50,000 level, after briefly touching the milestone during intraday trading.
The S&P 500 gained about 2%, while the Nasdaq Composite finished more than 2% higher.
The recovery on Friday came after a sharp sell-off driven largely by weakness in technology shares, particularly software stocks.
During that period, risk appetite had deteriorated, with Bitcoin also plunging before recovering some of its losses as markets stabilised.
Bitcoin rebounded above $70,000 on Friday after dipping below $61,000 the previous night, while several software stocks posted gains.
Focus turns to labour market and inflation data
The economic calendar was relatively light on Monday, but investors remained focused on a packed schedule later in the week.
Several Federal Reserve officials, including Governors Christopher Waller and Stephen Miran, are scheduled to speak, potentially offering insight into policymakers’ views on inflation and the labour market.
Attention is set to intensify on Wednesday with the release of the delayed January nonfarm payrolls report from the Bureau of Labor Statistics.
The report was originally scheduled for last Friday but was postponed due to the partial government shutdown.
The release follows last week’s report from ADP, which showed that private-sector payrolls rose by just 22,000 in January, well below expectations.
Economists surveyed by Dow Jones are forecasting that the government’s jobs report will show a gain of about 55,000 positions.
The employment data will carry additional weight this time, as the January release includes the annual benchmark revision to payroll figures.
The update is expected to show a downward revision to job growth for the year through March 2025, potentially reshaping perceptions of labour market strength.
Investors are also looking ahead to the January consumer price index, due Friday. The inflation report, which was also delayed by the shutdown, is expected to show a 2.5% annual rate, according to consensus estimates.
On the corporate front, another batch of earnings reports could influence sector rotation that has recently seen investors move away from high-growth technology stocks.
Coca-Cola and Ford Motor are both scheduled to report results on Tuesday, potentially offering insight into consumer demand and industrial conditions.
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