By Sinéad Carew and Ankika Biswas
(Reuters) -The S&P 500 closed barely higher after Monday's choppy trading session as investors held their breath ahead of a raft of big technology company earnings, a Federal Reserve policy decision on interest-rate cuts and key US labor data, all due this week.
Quarterly reports from market heavyweights such as Microsoft and Apple, Meta and Amazon.com this week will offer clues on whether technology stocks are vulnerable or can extend their recent rallies.
Investors are hoping that the Fed will end its meeting on Wednesday with a signal that it is preparing for a September rate cut in its policy verdict.
On Friday investors will closely monitor 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, the small-cap Russell 2000 lost 1% after three straight weeks of gains.
The Dow Jones Industrial Average closed down 49.41 points, or 0.12% at 40,539.93 while the S&P 500 rose 4.44 points, or 0.08%, to 5,463.54. The Nasdaq Composite advanced 12.32 points, or 0.07%, to 17,370.20.
Among the S&P 500's 11 major industry sector indexes, consumer discretionary was the benchmark's biggest boost with the sector's biggest contribution from Tesla as the electric vehicle maker's stock rallied after Morgan Stanley added it to its "top pick" U.S. autos' list.
The biggest percentage decliner among the major sectors was energy, which lost 0.9% as oil prices fell.
McDonald's shares closed up 3.7% after it said its $5-meal deal, launched late in June, was popular among customers shying away from higher-price items. As a result the fast food giant reported a surprise drop in sales, its first in 13 quarters.
Abbott Laboratories shares pared earlier losses to close down 0.4% after a jury ordered the healthcare company to pay $495 million in damages following a trial that found its formula for premature infants had caused a dangerous illness.
Crypto stock trading was also choppy with Coinbase Global closing down more than 3% while Riot Platforms and Marathon Digital finished down more than 5% after jump early in the day when bitcoin prices hit seven-week highs.
Declining issues outnumbered advancers by a 1.24-to-1 ratio on the NYSE where there were 268 new highs and 47 new lows.
On the Nasdaq, 1,485 stocks rose and 2,731 fell as declining issues outnumbered advancers by a 1.84-to-1 ratio. The S&P 500 posted 35 new 52-week highs and two new lows. The Nasdaq Composite recorded 120 new highs and 80 new lows.
On U.S. exchanges 9.96 billion shares changed hands compared with the 11.16 billion moving average for the last 20 sessions.
(Reporting by Sinéad Carew, Caroline Valetkevitch, Stephen Culp in New York, Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Pooja Desai and Richard Chang)
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