Stocks on Wall Street were mostly down on Monday as investors avoided risks ahead of this week's Federal Reserve meeting, which may yield clues as to the direction of interest rates in the coming months.

A bid by Paramount for Warner Bros Discovery, meanwhile, brought the tech and entertainment sectors to life, as the market braced for a bidding war with Netflix.

A monetary easing at Wednesday's Fed meeting is fully priced into stock prices, analysts said, but investors will scour the central bank's statement and news conference for insights into how many rate reductions might be on the cards next year, against a backdrop of stubborn inflationary pressures.

"Investors have priced in that rate cut already and now are anxiously waiting for the tone of the Fed," said Art Hogan of B Riley Wealth Management, who noted "a divide" among Fed policy makers that adds to uncertainty about 2026 monetary policy.

Analysts said stocks could pull back if Powell seems to close the door to further cuts next year.

"Investors want Fed Chair (Jerome) Powell to at least imply that they are still open to an additional cut in January," said Sam Stovall of CFRA Research. "They don't want it to just be one and done."

In New York, Warner Bros Discovery shares jumped 4.4 percent after Paramount countered last week's Netflix bid for the company with an all-cash offer worth US$108.4 billion.

Netflix fell 3.4 percent faced with the big-gun competitive bid.

Paramount Skydance surged by 9.0 percent in what was seen as a relief rally after analysts had predicted last week that a Netflix/Warner linkup could pose a major threat to Paramount's business.

The hostile offer sets up a bidding war between Paramount – whose CEO is David Ellison, the son of Larry Ellison, an ally of Donald Trump – and streaming behemoth Netflix.

Stock in Walt Disney – also seen in the cross-hairs of a future Netflix/Warner behemoth – rose by more than two percent.

Meanwhile, Boeing advanced 2.2 percent after announcing that it completed the takeover of supplier Spirit AeroSystems, saying the move will allow for more seamless operations and enhance quality control.

The deal is worth US$8.3 billion, including Spirit debt assumed by Boeing.

IBM climbed 0.4 percent as it unveiled a deal to purchase US data management company Confluent for US$11 billion, seeking to expand its footprint into the increasingly important field of real-time data for AI.

The S&P 500 slipped 0.4 percent, to 6,846, while the Dow dropped 0.5 percent, to 47,739, and the Nasdaq edged down by 0.1 percent, to 23,545. (AFP)