By Sinéad Carew and Ankika Biswas
(Reuters) -The Nasdaq and S&P 500 edged higher on Monday in choppy trading as investors anxiously awaited a raft of technology company earnings, a Federal Reserve policy decision on interest-rate cuts and key US labor data, all this week.
Quarterly reports from market heavyweights such as Microsoft and Apple, Meta and Amazon.com this week will offer clues on whether their stocks are vulnerable or can extend their recent rallies.
After the Fed ends its scheduled meeting on Wednesday investors are hoping that it will signal a September rate cut in its policy verdict.
On Friday investors will focus on the July non-farm payrolls report for signs of possible weakening in the labor market.
"Understandably we're wavering," said Mona Mahajan, principal and senior investment strategist at Edward Jones, pointing to the upcoming catalysts and Wall Street's Friday advance.
"Markets are largely in wait-and-see mode. We have big economic news this week, both the Fed meeting Wednesday and the jobs report on Friday. We also have huge earnings reports coming out of mega cap technology," she said.
Technology megacaps have dominated Wall Street's record-breaking run, prompting investors to recently turn their attention to laggards such as mid- and small caps, which are expected to benefit from a low-interest-rate environment.
"A lot of investors are keen to see whether the recent rotation we've been seeing in the markets has legs, or does mega cap technology really kind of shine through in its earnings reports," Mahajan added.
However, on Monday, the small-cap Russell 2000 dropped 1.3% after three straight weeks of gains.
The Dow Jones Industrial Average fell 10.05 points, or 0.02%, to 40,579.29. The S&P 500 gained 7.95 points, or 0.15%, at 5,467.05 and the Nasdaq Composite added 25.24 points, or 0.15%, at 17,383.12.
Among the S&P 500's 11 major industry sector indexes consumer discretionary provided the biggest boost with its lead contribution from Tesla. The electric vehicle maker's stock rose more than 5% after Morgan Stanley added it to its "top pick" U.S. autos' list.
McDonald's shares jumped more than 4% after it said its $5-meal deal, launched late in June, was popular among customers shying away from higher-price items. Despite the strong reception for the deal, the fast food giant reported a surprise drop in sales, its first in 13 quarters.
Abbott Laboratories shares dropped 1% after a jury ordered it to pay $495 million in damages in a trial that found the healthcare company's formula for premature infants had caused a dangerous illness.
Crypto stock trading was also choppy with Coinbase Global down more than 1% while peers Riot Platforms and Marathon Digital fell more than 4% after an initial jump when bitcoin prices hit seven-week highs.
Declining issues outnumbered advancers on the NYSE by a 1.40-to-1 ratio; on Nasdaq, a 1.93-to-1 ratio favored decliners.
The S&P 500 posted 30 new 52-week highs and two new lows; the Nasdaq Composite recorded 111 new highs and 64 new lows.
(Reporting by Sinéad Carew in New York, Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Pooja Desai and Richard Chang)
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