Wall Street’s momentum cools after its latest record-setting week

NEW YORK —  Wall Street edged back further from its record heights on Monday to start a shortened trading week.

The S&P 500 slipped 15.99 points, or 0.3%, to 5,218.19 in a quiet day of trading. The Dow Jones industrial average fell 162.26, or 0.4%, to 39,313.64, and the Nasdaq composite dropped 44.35, or 0.3%, to 16,384.47.

The market tapped the brakes following its big run last week, which was its best of the year and sent all three indexes to records on Thursday. Stocks climbed as the Federal Reserve indicated it’s still likely to deliver several cuts to interest rates this year, as long as inflation keeps cooling.

That has the S&P 500 on track for another winning month in what’s been a nearly unstoppable run since late October. The strength has been durable as the economy has remained resilient, “but the longer the market goes up without a notable pullback, the closer we come to such a move taking place,” according to Chris Larkin, managing director, trading and investing at E-Trade from Morgan Stanley.

For the market to continue rallying, more companies will need to deliver strong earnings growth to justify high prices, say strategists at Morgan Stanley.

United Airlines weighted on the market and lost 3.4%. Federal regulators are increasing their oversight of the company following several recent issues, including a piece of the outer fuselage falling off one jet and a plane losing a tire during takeoff.

Boeing trimmed some of its sharp losses for the year and rose 1.4%. Beset by worries about its safety and quality of manufacturing, the plane maker announced a shakeup to its management. Among the moves is the departure of its chief executive, set for the end of the year.

Wall Street is also preparing for the return of a stock trading under the ticker symbol “DJT,” the initials of former President Trump. The company behind his Truth Social platform completed its merger with Digital World Acquisition Corp. after Digital World’s shareholders approved the deal on Friday.

The company’s stock jumped 35.2% in what’s expected to be its last day trading under the ticker symbol of “DWAC.” On Tuesday, it will begin trading under “DJT,” which was used by Trump Hotels & Casino Resorts before it filed for Chapter 11 bankruptcy protection in 2004.

This week’s highlight for financial markets may be Friday’s report on U.S. consumer spending. It will also include the latest update on the measure of inflation that the Federal Reserve prefers to use. But the U.S. stock and bond markets will be closed that day in observance of Good Friday. The U.S. bond market will also close early on Thursday, which could bunch up trades in anticipation of the report.

Despite a string of recent reports that showed inflation remaining hotter than expected, the Federal Reserve seems to expect inflation to continue its longer-term cooling trend.

Traders largely expect the Federal Reserve to begin cutting rates in June. That would offer relief for the economy because the Fed’s main rate has been sitting at its highest level since 2001 for nearly eight months. High rates work to grind down inflation by slowing the entire economy and hurting prices for investments.

In the bond market, Treasury yields climbed. The 10-year yield rose to 4.24% from 4.20% late Friday.

In stock markets abroad, indexes mostly moved modestly in mixed trading across Europe and Asia.

Choe writes for the Associated Press. AP business writers Yuri Kageyama and Matt Ott contributed to this report.