Wall Street closed lower on Monday as investors braced for a slew of economic data later this week, while assessing reports on Federal Reserve candidates and commentary from policymakers for clues on the interest rate outlook.

The non-farm payroll figures for October and November are due later this week, along with reports on retail sales, business activity and inflation. October's jobs data was delayed by the government shutdown earlier this quarter.

“Markets today are struggling with where to find the leadership, in terms of not wanting all the eggs in the AI basket and not having a lot of data yet," said Carol Schleif, chief investment officer at BMO Family Office. "People will hold their breath a little bit before the jobs numbers this week and whether or not those are supportive of more rate cuts.”

The S&P 500 and the Nasdaq had logged their steepest daily declines in more than three weeks on Friday amid concerns about inflation and debt-fuelled AI investments.

Traders also assessed a report that White House economic adviser Kevin Hassett's candidacy for the Fed chair role received some pushback from people close to US President Donald Trump.

Speculation has been rife over a possible frontrunner as Jerome Powell's term ends in May. Expectations for a dovish Fed chair have fuelled bets for interest rate cuts next year.

Also on Monday, New York Fed President John Williams said the central bank's interest rate cut last week leaves it in a good position, while Fed Governor Stephen Miran argued that current inflation does not reflect the true supply-demand dynamics.

The S&P 500 lost 0.2 percent, to 6,816, the Dow edged down 0.1 percent, to 48,416, and the Nasdaq fell 0.6 percent, to 23,057. (Reuters)