US stocks closed lower as investors remained cautious ahead of the third-quarter earnings season, with no new economic data or catalysts to sway market sentiment.
The S&P 500 and Nasdaq fell from their previous highs, while the Dow Jones Industrial Average was the biggest loser among the three major indexes.
The Dow Jones Industrial Average fell 0.52% to 46,358.42 points, the S&P 500 fell 0.28% to 6,735.11 points, while the technology-focused Nasdaq fell 0.08% to 23,024.63 points.
In other news, the US government shutdown, which has entered its ninth day without much sign of progress, continues to deprive investors of access to key economic data.
With the start of the third-quarter earnings season in a few days, the lack of market catalysts has prompted investors to focus on statements from monetary policymakers for clues on a possible interest rate cut by the end of the year.
According to CME's FedWatch tool, the market is now pricing in a 94.6% probability that the Federal Reserve (Fed) will cut interest rates by 25 basis points at its policy meeting scheduled for October 28-29.
In addition, four major banks – JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo – are scheduled to report quarterly results next Tuesday, marking the unofficial start of the third-quarter earnings season.
Meanwhile, shares of retailer Costco Wholesale rose 3.1% after reporting sales data for September, while shares of Albemarle jumped 5.3% on a price target hike by TD Cowen and China's move to tighten controls on rare earth exports.
Trading volume on US exchanges was worth $20.44 billion, compared to an average of $19.75 billion over the past 20 trading days.
