Wall Street's main indexes fell on Monday after the S&P 500 and Nasdaq reached record highs, as investors halted before a week of critical jobs data and Fed Chair Jerome Powell's congressional testimony.
As the AI-driven tech surge continues to dominate Wall Street, the Nasdaq opened March with an intraday all-time high on Friday and closed at its greatest level for the second day.
BofA Global Research raised its year-end prediction for the S&P 500 to 5,400 from 5,000, a 5% increase from current levels, amid a record run.
"Some type of negative AI development would be your No. 1 risk, along with sticky inflation and geopolitical issues," said Dakota Wealth senior portfolio manager Robert Pavlik.
Monthly non-farm payrolls, JOLTS job vacancies, the ADP National Employment report, and the Fed's "Beige Book" will provide economic insights throughout the week.
A stronger-than-expected economy risks reigniting inflation if policy eases too soon, so investors have already reduced estimates for how quickly and deeply the Fed will lower rates.
After inflation rose, economists expect Powell to remain in wait-and-see mode for his Wednesday and Thursday congressional testimony.
CME Group's FedWatch program gives traders a 70.5% chance of the first rate decrease in June and 89% in July.
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