US stocks edged lower on Monday, with investors taking a post-Thanksgiving pause as the holiday shopping season kicked in to high gear and retailers lured bargain hunters with Cyber Monday deals.

All three major US stock indices ended the session modestly lower.

"Markets are taking a breather to digest these gains we’ve seen in November," said Tom Hainlin, national investment strategist at US Bank Wealth Management in Minneapolis. "We’re at the higher end of a trading range we’ve been in for some time."

Online shopping deals as part of Cyber Monday are expected to entice shoppers to spend a record US$12 billion, according to Adobe Analytics, in the latest upbeat sign regarding the health of the American consumer, whose spending is responsible for about 70 percent of US GDP.

"Coming off four weeks of very strong and positive market activity we’re seeing investors take a bit of a breather and focus on data," said Greg Bassuk, chief executive officer at AXS Investments in New York. "This week all eyes will be focused on additional inflation data as well as consumer confidence and spending to determine if Main Street has kept up with Wall Street."

Resilience of the consumer and the tightness of the labour market amid signs of a dampening economy have many market-observers digesting the possibility that while the Federal Reserve has reached the end of its tightening cycle, it might keep restrictive policy rates in place for longer than expected.

On the economic front, a larger than expected drop in new home sales added to the subdued sentiment. Later this week, market participants look to the Commerce Department's second take on third-quarter GDP expected on Wednesday, to be followed on Friday with its broad-ranging Personal Consumption Expenditures (PCE) report.

Remarks from Federal Reserve policymakers later in the week will also be parsed for clues regarding the duration of the central bank's restrictive policy.

"We expect that (the Fed) will continue to be cautious about concluding that they’ve reached the end of rate hikes," Hainlin added. "We’re close to - if not at - the peak rate, so the debate is how long rates will stay there, and when or if they’ll cut rates in 2024."

The Dow Jones Industrial Average fell 0.2 percent to 35,333, the S&P 500 lost 0.1 percent to 4,553 and the Nasdaq Composite dropped 0.1 percent to 14,241.

Amid the Cyber Monday fervour, Amazon gained and Walmart edged higher. (Reuters)