The S&P 500 and the Dow Jones Industrial Average slumped on Monday as the USA tariffs signed into law last week by President Donald Trump weighed on industrials, though gains in tech stocks boosted the Nasdaq.
Technology (+0.3%) was among the top-performing sectors, with chipmakers setting the pace amid reports that Intel might look to acquire Broadcom, which is itself in pursuit of a deal for Qualcomm.
Many of the United States' big manufacturers have suffered since U.S. President Donald Trump announced plans to impose tariffs on steel and aluminum imports, a move that could increase their costs while hampering sales overseas.
"The market was particularly optimistic that wage growth wasn't too hot for fear of inflationary concerns", said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
The pullback in wages tempered speculation the Federal Reserve would project four rate hikes - or dot plots - at its policy meeting next week, instead of the current three.
Early gains for the FTSE 100 quickly petered out and it ended the session down 0.1 per cent, missing out on a rally that lifted European stocks, with Germany's DAX up 0.6 per cent.
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However, the S&P and the Dow have almost reclaimed those losses.
The Dow Jones Industrial Average closed at 25,178.61 for a loss of -157.13 points or -0.62%. The S&P 500 index was down 3.55 points to 2,783.02 and the Nasdaq composite index was up 27.51 points to close at another record high of 7,588.32.
Investors will pore over the next round of data on consumer prices and retail sales due this week for signs of rising price pressure. Both S&P 500 and Nasdaq rose as much as 0.7 percent before trading lower.
Oclaro jumped 25 percent and was the most traded stock after laser and optical fibre specialist Lumentum Holdings said it would buy the optical components producer for US$1.7 billion.
Broadcom gained 3.4 percent while shares in Qualcomm were flat.
Advancing issues outnumbered declining ones on the NYSE by a 1.22-to-1 ratio; on Nasdaq, a 1.45-to-1 ratio favored advancers. Shares in Reckitt Benckiser and tobacco makers British American Tobacco and Imperial Brands fell between 0.4 per cent and 1.9 per cent.