NEW YORK, June 10 — Wall Street slipped today as wary investors steered clear of risky assets ahead of a key inflation reading and a meeting of the Federal Reserve this week, which could provide clues on the central bank’s policy-easing path over the next few months.

Indexes closed slightly lower on Friday following a choppy week, after conflicting data showed that while Nonfarm Payrolls numbers for May were much stronger than expected, unemployment had ticked higher and household surveys were betraying signs of economic distress.

“Investors were hoping for a more polarised set of data points, but instead, the unemployment number increasing, in contrast to the actual jobs that were added, are confusing a lot of people, making the job of the Fed more difficult,” said Peter Andersen, founder of Andersen Capital Management.


Attention now turns to the Consumer Price Index inflation report for May on Wednesday as well as the conclusion of the Fed’s two-day policy meeting, in which the central bank is overwhelmingly expected to hold interest rates steady.

Markets dialed back expectations for rate cuts by the Fed in September after Friday’s data, with the odds of a reduction standing at 50 per cent. Expectations had risen as high as 69 per cent last week.

Pricing also implies just one cut this year versus two prior to the payrolls numbers, according to LSEG data.


“Right now, interest rates are what I would call at equilibrium and are perfectly positioned for a growing steady economy. I would caution the Fed on making any changes at this point,” Andersen said.

Nvidia slipped 0.1 per cent in the wake of a 10-for-one stock split that went into effect after markets closed on Friday, leading to chatter about the chances of its inclusion in the blue-chip Dow.

At 9.40am ET, the Dow Jones Industrial Average was down 118.55 points, or 0.31 per cent, at 38,680.44, the S&P 500 was down 13.16 points, or 0.25 per cent, at 5,333.83, and the Nasdaq Composite was down 31.72 points, or 0.19 per cent, at 17,101.41.

Eight of the S&P 500’s 11 sectors were in the red, led by a 0.8 per cent decline in financial stocks, while the small-cap Russell 2000 index slipped 0.8 per cent.

Apple was flat ahead of the iPhone maker’s annual developer conference for updates on how it is integrating artificial intelligence into its offerings.

Southwest Airlines jumped 7.3 per cent after activist investor Elliott Investment Management disclosed it has built up a US$1.9 billion position in the company.

CrowdStrike, KKR & Co and GoDaddy rose between 1.7 per cent and 7.7 per cent after S&P Dow Jones Indices said the companies would be included in the S&P 500 as of June 24.

Diamond Offshore Drilling added 8.8 per cent after oilfield services firm Noble said it would buy the smaller rival in a US$1.59 billion deal.

Advanced Micro Devices dropped 4.1 per cent after Morgan Stanley downgraded the chip stock to “equal weight” from “overweight”.

Declining issues outnumbered advancers by a 2.37-to-1 ratio on the NYSE, and by a 2.27-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and three new lows, while the Nasdaq recorded 17 new highs and 93 new lows. — Reuters