Banks lift Dow, semiconductor shares weigh on Nasdaq

By Ankika Biswas and Lisa Pauline Mattackal

(Reuters) - Banking stocks lifted the Dow, while semiconductor shares weighed on the Nasdaq on Monday as focus moves to labor market data due later in the week for cues on the Federal Reserve's monetary policy path.

The S&P 500 banking index jumped 1.3% to its highest in more than a month, with shares of JP Morgan Chase touching an all-time high. Benchmark U.S. Treasury yields jumped to their highest in over two weeks. [US/]

AI chip firm Nvidia fell 1% and other semiconductor stocks such as Micron Technology and Advanced Micro Devices dipped 2.4% and 4.5%, respectively. The Philadelphia SE Semiconductor index was down 1.3%.

Non-farm payrolls data is due on Thursday, when trading will be shut for equities on account of U.S. Independence Day.

Traders have largely stuck to their bets of around two interest rate cuts this year, starting from September, according to LSEG FedWatch.

"The market looks to start the second-half with more tailwinds than headwinds ... we seem to be inching closer to a place where the Fed will feel comfortable enough cutting rates and that likely happens in September," said Art Hogan, chief market strategist at B Riley Wealth.

Manufacturing PMI data from the Institute for Supply Management showed manufacturing contracted for a third straight month in June, while prices paid dropped to a six-month low in an encouraging sign for the Fed's battle with inflation.

Also scheduled for the week are JOLTS job openings data on Tuesday, and ADP employment, factory orders, ISM services PMI data and minutes of the Fed's latest policy meeting on Wednesday.

Comments from New York Fed President John Williams are due later on Monday.

At 10:16 a.m. ET, the Dow Jones Industrial Average was up 62.31 points, or 0.16%, at 39,181.17, the S&P 500 was down 9.52 points, or 0.17%, at 5,450.96, and the Nasdaq Composite was down 47.20 points, or 0.27%, at 17,685.40.

The Nasdaq and the benchmark S&P 500 notched their third straight quarterly gains on Friday, with the tech-heavy index doing so for the first time in three years.

As the top few heavily weighted stocks have largely supported Wall Street's upward trajectory on optimism around artificial intelligence and interest rate cuts, the blue-chip Dow has lagged its peers with a quarterly decline, raising some concerns about the need for greater diversification in investor holdings.

Spirit AeroSystems gained 3.5% following Boeing's deal to buy back the fuselage supplier for $4.7 billion in stock. Boeing's shares rose 2.0%.

Chewy slipped 4.4%, reversing sharp gains in early trading, after stock influencer Keith Gill, also known as "Roaring Kitty", disclosed a 6.6% stake in the pet products retailer.

Cryptocurrency-related stocks Coinbase Global, Riot Platforms and MicroStrategy gained between 1.2% and 4% after bitcoin prices jumped to a one-week high.

Declining issues outnumbered advancers for a 1.27-to-1 ratio on the NYSE and a 1.38-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and one new low, while the Nasdaq recorded 29 new highs and 46 new lows.

(Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru; Editing by Shounak Dasgupta)