Stocks lower as megacaps weigh with earnings, data on deck

U.S. stocks declined on Monday, weighed down by megacaps as investors awaited several catalysts including key economic data and earnings from some of the largest U.S. companies.

Megacaps Nvidia NVDA, off nearly 4%, and Amazon AMZN, down about 1.5%, were the primary drags on the benchmark S&P 500 index.

The Wall Street Journal reported on Sunday that China's Huawei Technologies was preparing to test its artificial-intelligence processor, which it hopes can replace some of Nvidia's higher-end products.

Of the so-called Magnificent Seven heavyweight companies, Amazon is scheduled to report quarterly results later this week, along with Apple AAPL, Meta Platforms META and Microsoft MSFT.

In all, 180 S&P 500 components are set to report earnings this week, and investors are likely to monitor how U.S. President Donald Trump's new tariffs could affect future profits.

"We're going to get four of the Mag 7 reporting this week and so this is a very important earnings week," said Jack Ablin, chief investment officer at Cresset Capital in Chicago.

"I'd love to hear any kind of forward guidance and it will be really interesting to hear some of these CEOs talk about how they're planning to navigate the potential trade war."

The Dow Jones Industrial Average DJI fell 82.35 points, or 0.21%, to 40,027.29, the S&P 500 SPX lost 30.59 points, or 0.56%, to 5,494.61 and the Nasdaq Composite IXIC dropped 150.69 points, or 0.87%, to 17,232.25.

Though first-quarter earnings from S&P 500 companies are expected to climb 10.9% from a year ago, according to LSEG data, many firms have warned of the uncertainty caused by U.S. trade policy, with some cutting or completely pulling forecasts.

Tech S5INFT and consumer discretionary S5COND were the worst performing of the 11 major S&P sectors, while the defensive utilities S5UTIL led gainers.

Investors will also parse important economic data, including the personal consumption expenditures price index, and a flurry of labor market data culminating in the monthly U.S. payrolls report on Friday.

A gain of more than 2% in Boeing BA helped limit the Dow's decline after Bernstein raised the aircraft maker's stock rating and price target.

Trading was choppy after stocks opened firmer, with the S&P 500 and the Nasdaq briefly touching their highest levels since April 2, prior to Trump's tariff announcement.

Markets have shown signs of stabilizing in recent weeks, on optimism over potential deals between the U.S. and its trading partners, especially China.

However, a lack of clarity on Sino-U.S. negotiations has kept the market sensitive to any developments. The S&P 500 SPX remains more than 10% below its February record high as investors look for clues on the extent of any tariff damage.

A majority of economists polled by Reuters said the risks of the global economy slipping into recession this year were high.

Spirit AeroSystems SPR rose 2.6% after Airbus AIR reached a deal to take over some of the company's plants.

Declining issues outnumbered advancers by a 1.22-to-1 ratio on the NYSE and by a 1.52-to-1 ratio on the Nasdaq.

The S&P 500 posted three new 52-week highs and two new lows, while the Nasdaq Composite recorded 37 new highs and 51 new lows.