U.S. stocks closed mostly lower, with the Dow industrials and S&P 500 logging modest losses, as the mood turned cautious ahead of a speech by Federal Reserve Chairwoman Janet Yellen at the end of the week.
A retreat in crude-oil prices also weighed on the broader market, dragging shares of oil and gas companies into the red.
The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.38% shed 1.23 points, or less than 0.1%, to finish at 2,182.64. The energy sector sank 0.9%, marking the worst decline among the large-cap benchmark’s 10 sectors. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.44% eased 23.15 points, or 0.1%, to end at 18,529.42, pressured by declines in Apple Inc. /zigman2/quotes/202934861/composite AAPL -1.03% and Johnson & Johnson /zigman2/quotes/201724570/composite JNJ -0.38% . Visa Inc. /zigman2/quotes/203660239/composite V -0.87% shares were the best performer among blue chips.
Meanwhile, the Nasdaq Composite Index /zigman2/quotes/203660239/composite V -0.87% bucked the losing trend for the benchmarks to edge up 6.22 points, or 0.1%, to close at 5,244.60.
Stocks mostly traded in a narrow range during the session.
Investors are awaiting clues about U.S. monetary policy from Federal Reserve Chairwoman Janet Yellen at a retreat of economists and Fed members in Jackson Hole, Wyo., on Friday.
In her planned speech in Jackson Hole, Yellen could signal that the Fed is ready to raise interest rates as soon as next month. Such a statement may weigh on equity investors, who have enjoyed central-bank policies, that have been supportive of the multiyear run-up in stocks.
Though some investors are skeptical about the U.S. central bank’s conviction in resuming rate increases for the first time since December.
Mislav Matejka, an equity strategist at J.P. Morgan, said the Fed isn't likely to act until after the U.S. presidential election, a view supported by those who believe the central bank doesn't want to rock the boat amid mounting political uncertainty.
The CME Group’s FedWatch tool, a gauge of Wall Street’s expectations for a Fed interest-rate hike, indicated that the market was pricing in an 18% probability of a rate increase in September and 43.1% in December.
“The markets currently have March priced in [as the best chance] for the next rate hike, and if Yellen is seriously determined to move earlier, she must take advantage of Friday’s opportunity to drive that message home,” said Craig Erlam, senior market analyst at Oanda, in a research note.
On Sunday, the Fed’s No. 2 official, Stanley Fischer, said the central bank is close to its employment and inflation targets, suggesting he is open to further interest rate increases this year. That helped the dollar /zigman2/quotes/210598269/delayed DXY -0.05% to gain slightly Monday.