US stocks closed lower for a second straight session as investors took profits after all three major indexes neared record highs.
Federal Reserve Chairman Jerome Powell signaled that stock prices could be overvalued ahead of this weekend's inflation report.
Powell also said on Thursday that asset prices are at record highs, while highlighting the Fed's challenge in balancing monetary policy decisions going forward.
Last week's rate cut supported a rally in equities in September, which is typically a weak month for stocks. Investors are now hoping for further easing to maintain the rally's momentum.
Investors are also weighing the direction of the central bank's rate cuts as it seeks to support the economy amid signs of labor market weakness without stoking inflationary pressures.
The Dow Jones Industrial Average fell 0.37% to 46,121.28 points, the S&P 500 fell 0.28% to 6,637.98 points, while the technology-focused Nasdaq fell 0.33% to 22,497.86 points.
Meanwhile, Oracle shares fell 1.7% after Bloomberg News reported that the company planned to raise $15 billion through the sale of corporate bonds.
Conversely, Lithium Americas shares nearly doubled to $6.01 after Reuters reported that President Donald Trump's administration was considering taking an equity stake of up to 10% in the company.
Investors' attention is now also focused on the Personal Consumer Expenditures (PCE) Price Index data, the Fed's preferred inflation gauge, which will be published on Friday at 8:30 pm Malaysian time.
