US stocks closed lower as investors awaited inflation data this week to assess the outlook for interest rates while monitoring US-China trade developments.
Investors expected changes in the US Federal Reserve (Fed) and a weak labor market to push monetary policy more dovish by the end of the year, boosting market confidence.
According to LSEG data, the July consumer inflation report will be released on Tuesday and investors expect the Fed to cut borrowing costs by around 60 basis points by December.
The Dow Jones Industrial Average fell 0.45% to 200.52 points, the S&P 500 fell 0.25% to 16.00 points, while the technology-focused Nasdaq fell 0.3% to 64.62 points.
In other news, a Reuters official said that semiconductors have agreed to hand over 15% of their revenue from sales of advanced chips to China to the US.
Analysts said the levy risks cutting into chipmakers' profit margins and is an early sign that Washington will impose taxes on key US exports, not just semiconductors.
Meanwhile, President Donald Trump also signed an executive order extending a 90-day delay in a sharp increase in US tariffs on imports from China.
Micron shares also rose 4% after raising their fourth-quarter forecasts, while Intel shares jumped 3.5% following a visit by CEO Lip-Bu Tan to the White House a week after Trump called for his removal.
Trading volume on US exchanges hit $15.5 billion, compared with an average of $18.3 billion over the full 20 trading days.
