Wall Street's main indexes ended lower on Friday (Saturday AEST) as investors turned cautious after Federal Reserve Chair Kevin Warsh reiterated the central bank's focus on fighting inflation, strengthening expectations for a potential interest rate hike.
Without confidence that inflation is heading clearly and with sufficient speed to the Fed's 2% goal, the central bank would have "work to do", Warsh said in his first Jackson Hole speech.
The Dow Jones Industrial Average eased 9.5 points, or 0.02%, to 53,560.0. The S&P 500 fell 19.2 points, or 0.3%, to 7,711.8, while the Nasdaq Composite declined 138.9 points, or 0.5%, to 26,402.4.
For the week, the Dow climbed 0.5%, the S&P 500 gained 0.5%, and the Nasdaq rose 0.9%
Traders increased their bets on a September rate hike after Warsh said recent inflation data did not suggest a change in trend.
According to the CME Group FedWatch Tool, markets are now pricing in a 56.9% chance of a rate hike in September, up from 39.9% a week ago.
Chip stocks were mixed, retreating from the previous session's rally sparked by Nvidia's blockbuster forecast, which signalled that the artificial intelligence-driven boom had further to run.
Market heavyweight Nvidia slipped 4.6%, while Marvell Technology tumbled 10.3% on doubts over the timing of revenue from its AI chip agreement with Alphabet's Google, despite the company raising its 2027 revenue forecast.
Most major technology stocks finished higher. Microsoft added 1.7%, Alphabet gained 1.7%, Meta rose 1.2%, and Apple advanced 1.6%.
PayPal fell 12.7% a day after Bloomberg News reported that a consortium involving buyout firm Advent and payments processor Stripe had abandoned its pursuit of the payments company.
Gap shares advanced almost 13% after the retailer named industry veteran Michael Francis as Old Navy's new CEO and raised its annual profit forecast.
Ulta Beauty fell 4.2% after the cosmetics retailer reported weaker comparable sales growth in the second quarter.
On the bond markets, 10-year and two-year Treasury yields rose 1.2% and 3%, respectively, to 4.73% and 4.36%.
