Volkswacht Bodensee - Stocks steady ahead of key US inflation data

Stock indices pulled back at the start of trading in New York after setting fresh records yet again on Friday following the Fed's resumption of interest rate cuts.

The stock market is "likely experiencing a profit-taking breather", Briefing.com analyst Patrick O'Hare said ahead of the opening bell, noting that the S&P 500 index had gained 3.2 percent in September and the Nasdaq Composite 5.5 percent in a streak of record-setting sessions.

But investors only briefly needed to catch their breath, with stocks climbing into positive territory in morning trading as the S&P 500 and Nasdaq Composite set fresh all-time highs.

Global equities have enjoyed a healthy run-up in recent months on optimism that the US central bank will lower borrowing costs several times before the end of 2025 over worries about a softening labour market.

On the heels of recent economic reports showing weaker US jobs growth, the Fed last week lowered borrowing costs by 25 basis points, its first reduction this year.

Investors will be listening for what Fed policymakers have to say during public appearances this week.

They will also be waiting for the release on Friday of the personal consumption expenditures (PCE) price index, which is the Fed's preferred measure of inflation.

"The big market moving announcement is likely to be the US PCE inflation report," said AJ Bell investment director Russ Mould.

The dollar fell against major rivals as the US interest rate cut weighed on the greenback, while the price of gold hit a fresh high.

Crude oil prices fell around one percent as traders focused on concerns that production will outstrip demand.

In European trading, London edged out a gain, but Frankfurt and Paris ended the day lower.

- 'US-China detente' -

As the new trading week kicked off, investors took some heart from talks between US President Donald Trump and Chinese leader Xi Jinping on Friday.

Trump said progress was made "on many very important issues", including a deal to sell blockbuster social media app TikTok.

He added that the pair would meet on the sidelines of an Asia-Pacific Economic Cooperation summit in South Korea at the end of next month and that he would travel to China next year.

"While lacking apparent substance... (the meeting) does look to have helped create a positive atmosphere to enable extension of the ongoing US-China detente," said National Australia Bank's Ray Attrill.

Mumbai edged down as India's $283-billion tech sector took a hit after Trump on Friday ordered an annual $100,000 fee be added to new H-1B skilled worker visas, creating potentially major repercussions for the tech industry where such permits are prolific.

Shares in Amazon and Microsoft, two major users of H-1B visas, were lower on Monday.

"We believe that the tech giants will be able to afford the visas, and this selloff in tech shares will be temporary, in the same way that tariff concerns weighed on stocks before dying down," said Kathleen Brooks, research director at XTB trading platform.

Shares in Porsche fell eight percent following news that it will dramatically slow its shift to electric vehicles amid weak demand. That prompted parent company Volkswagen to warn of a multibillion-euro hit and saw its shares close nearly seven percent lower.

- Key figures at around 1530 GMT -

New York - Dow: FLAT at 46,330.56 points

New York - S&P 500: UP 0.2 percent at 6,676.10

New York - Nasdaq Composite: UP 0.3 percent at 22,698.77

London - FTSE 100: UP 0.1 percent at 9,226.68

Paris - CAC 40: DOWN 0.3 percent at 7,830.11

Frankfurt - DAX: DOWN 0.5 percent at 23,527.05

Tokyo - Nikkei 225: UP 1.0 percent at 45,493.66 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 26,344.14 (close)

Shanghai - Composite: UP 0.2 percent at 3,828.58 (close)

Euro/dollar: UP at $1.1772 from $1.1745 on Friday

Pound/dollar: UP at $1.3502 from $1.3472

Dollar/yen: DOWN at 147.83 yen from 147.90 yen

Euro/pound: UP at 87.19 pence from 87.18 pence

West Texas Intermediate: DOWN 0.4 percent at $62.15 per barrel

Brent North Sea Crude: DOWN 0.4 percent at $66.43 per barrel

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