The Dow Jones Industrial Average fell by 240.52 points, or 0.60 percent, to 39,566.85. The S&P 500 declined by 10.58 points, or 0.20 percent, to 5,243.77. The Nasdaq Composite Index increased by 17.37 points, or 0.11 percent, to 16,396.83.
Eight of the 11 primary S&P 500 sectors ended in red, with real estate and health leading the laggards by losing 1.77 percent and 0.88 percent, respectively. Meanwhile, communication services and energy led the gainers by rising 1.45 percent and 0.79 percent, respectively.
Investors continue to exercise caution regarding the timing of the Federal Reserve's rate-cutting schedule for this year and the timeframe for meeting their 2 percent inflation goal. Fed Chair Jerome Powell noted last Friday that economic growth remains robust, and inflation remains elevated above the target level.
"That means we don't need to be in a hurry to cut," Powell said. "The economy is strong right now, and the labor market is strong right now. And inflation has been coming down. We can and we will be careful about this decision because we can be."
Traders also responded to the release of the personal consumption expenditures (PCE) price index, which came out during the market's closure for Good Friday. The core PCE, which excludes food and energy, indicated a 2.8 percent increase in inflation over a 12-month period in February, aligning with expectations. The Commerce Department reported that on a monthly basis, the metric rose by 0.3 percent from the previous month.
In March, according to the Institute for Supply Management (ISM), there was expansion in U.S. business activity for the first time since September 2022, indicating the economy's resilience. The Manufacturing Purchasing Managers' Index (PMI) rose to 50.3, exceeding the expected 48.4 and showing improvement from February's 47.8.
The U.S. yield on the 10-year note closed at 4.329 percent Monday, rising from 4.192 percent on Thursday and marking the second-highest settlement of the year. Yields have been increasing this year as investors have delayed their expectations for when the Fed will begin implementing rate cuts.
In corporate news, AT&T's stock declined following reports that the personal data of numerous customers had been exposed on the dark web on Monday. Additionally, shares of the parent company of Truth Social, a social media platform associated with Donald Trump, also experienced a deep drop. Market participants are monitoring whether the company's board will authorize Trump to sell or use the stock as collateral.
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