S&P, Nasdaq take breather as markets assess data

The S&P 500 and the Nasdaq have slipped after ending the previous session on a positive note, while investors assessed some of the last economic datasets ahead of the Federal Reserve's meeting.

The Nasdaq soared past the 20,000 mark for the first time on Wednesday as the technology rally showed no signs of a halt, while the S&P 500 closed at its highest in nearly a week after an in-line inflation reading locked in a 25 basis point cut by the Fed at its December 17-18 meeting.

Meanwhile, data showed US producer prices rose more than expected in November amid a surge in the cost of food, but a moderation in the prices of services offered hope that the disinflationary trend remains in place.

"Those numbers are a little bit hotter than expectations and (are) on the heels of CPI," said Thomas Martin, senior portfolio manager at Globalt Investments.

"(The Fed) is going to (cut rates) because it wants to stay on that path and would like to have rates be lower, but there's this risk about inflation."

Separately, data showed the number of Americans filing new applications for unemployment benefits rose unexpectedly to 242,000 for the week ended December 7, above estimates of 220,000.

Trader bets on the cut next week stand at over 98 per cent, according to CME's FedWatch Tool. They had risen after a jobs report on Friday that showed unemployment rose last month despite a surge in jobs growth.

However, bets also indicate expectations of a pause in January after several Fed officials last week urged caution over the pace of monetary policy easing as the economy remained resilient.

In early trading on Thursday, the Dow Jones Industrial Average rose 40.06 points, or 0.09 per cent, to 44,188.62, the S&P 500 lost 15.55 points, or 0.26 per cent, to 6,068.64 and the Nasdaq Composite lost 95.17 points, or 0.48 per cent, to 19,939.73.

Seven of the 11 major S&P sub-sectors were trading lower, with information technology leading losses, down 0.6 per cent.

Most megacap and growth stocks trended lower early on, with Nvidia down over one per cent.

Wall Street's main indexes have set new record highs multiple times this year, thanks to a rally driven by heavyweight tech stocks that have exploited the euphoria around artificial intelligence and the Fed's interest rate cuts.

US equities capped off a remarkable November after Donald Trump's victory in the presidential election on the prospects of business-friendly policies adding to corporate profits, and have kicked off December on a broadly positive note.

Among significant movers, Adobe slid 11.2 per cent after the Photoshop maker forecast fiscal 2025 revenue below Wall Street expectations on Wednesday.

Nordson lost 3.6 per cent as the dispensing equipment maker forecast fiscal 2025 revenue below Wall Street estimates.

Centene gained 1.4 per cent following the health insurer's forecast of its 2025 profit above estimates.

Declining issues outnumbered advancers by a 1.62-to-1 ratio on the NYSE and by a 1.4-to-1 ratio on the Nasdaq.

The S&P 500 posted five new 52-week highs and three new lows, while the Nasdaq Composite recorded 23 new highs and 44 new lows.