US stocks ended with modest losses on Monday, as the focus shifted after last week's AI-fueled rally to upcoming economic data that could affect the timing of the Federal Reserve's expected interest rate cut.

The release of January's personal consumption expenditures price index (PCE)- the Fed's preferred inflation gauge – on Thursday could dampen the recent enthusiasm should the data indicate price pressures are not cooling fast enough.

Markets have all but ruled out a cut at the Fed's March meeting and have recently pushed back expectations for easing to June from May, CME's FedWatch Tool showed, on the heels of surprisingly strong consumer and producer price data.

Reports on durable goods, consumer confidence and manufacturing activity are due later this week.

"It's a lot of position squaring ahead of the big data, investors are just trying to make sure they're not underweight or overweight since trends are not moving," said Rob Haworth, senior investment strategist at US Bank Wealth Management in Seattle.

"The jobs report is another week away so eyes are kind of turning Thursday to PCE price index rather than anything else. There is a lot more data this week than last week but it's still not the biggest of the data."

A strong forecast from chip designer Nvidia last week added to this year's artificial intelligence frenzy, helping to push the Dow and S&P to new highs and the Nasdaq just shy of its November 2021 record, while keeping disappointment over the Fed's delayed rate cut in check.

The Dow Jones Industrial Average fell 0.16 percent, to 39,069. The S&P 500 lost 0.38 percent, at 5,070 and the Nasdaq Composite lost 0.13 percent, at 15,976.

The S&P 500 has gained for 15 of the past 17 weeks – something which has only happened only once in the last 50 years, in 1989, according to Deutsche Bank.

Helping to curb declines on the Nasdaq was a 4.02 percent gain in Micron Technology as it started mass production of its high-bandwidth memory semiconductors for use in Nvidia's latest AI chip.

Google-parent Alphabet stumbled 4.44 percent after announcing plans to relaunch its AI tool in the next few weeks. It was paused last week after inaccuracies in some historical depictions.

Warren Buffett-led Berkshire Hathaway dipped 1.94 percent, erasing early gains on investor worries after the US government warned of a lawsuit against its power company, PacifiCorp. (Reuters)
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Last updated: 2024-02-27 HKT 08:35