S&P 500 dips from record closing high as focus shifts to Fed meet

The S&P 500 and the Dow eased on Monday, a day after the S&P 500 hit a record closing high, as investors awaited cues from the Federal Reserve's meeting this week on the central bank's outlook on inflation and the future of bond purchases.

The technology-heavy Nasdaq rose for the sixth time in the past seven sessions, lifted by gains in shares of Tesla Inc, Apple Inc and Amazon.com Inc.

Recent data has indicated that the US economy is regaining momentum but not overheating, taming worries about inflation and sending the S&P 500 to an all-time high.

While the Fed has reassured that any spike in inflation would be transitory, policymakers could begin discussing the tapering of bond buying at the Tuesday-Wednesday meeting. Most analysts, however, don't expect a decision before the central bank's annual Jackson Hole, Wyoming, conference in August.

Any shift in the Fed's dovish rhetoric could upend equity markets. The benchmark has climbed 13% this year while the Dow and the Nasdaq have risen 12% and 9.5%, respectively.

"As we get closer to the end of the summer, they (the Fed) are going to want to start talking about taper and telegraphing when they're going to raise rates and that's where we do have a potential for a misstep," said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors in Newport Beach, California.

"Tech is performing a little bit stronger than value, but I don't think that is a permanent trend. Value will remain a dominant sector."

High-growth tech-related stocks, which were at the heart of a selloff driven by fears of rising rates, have regained their footing this month at the expense of economy-linked industrials , financials and materials stocks.

Healthcare and financials were the biggest drag on the S&P 500 on Monday, while technology and consumer discretionary provided the biggest boost.

At 11:18 a.m. ET, the Dow Jones Industrial Average fell 188.53 points, or 0.55%, to 34,291.07, while the S&P 500 lost 8.32 points, or 0.20%, to 4,239.12. The Nasdaq Composite gained 42.10 points, or 0.30%, to 14,111.52.

Energy stocks added 0.3% as crude prices hit their highest levels in more than two years.

Lordstown Motors Corp tumbled 18% after it said Chief Executive Steve Burns and Chief Financial Officer Julio Rodriguez have resigned, days after the electric-truck maker warned that it may not have enough cash to stay in business over the next year.

Tesla gained 1.3% as CEO Elon Musk tweeted that the electric carmarker may resume bitcoin transactions. Bitcoin vaulted back above $40,000 on Musk's comments.

Declining issues outnumbered advancers by a 1.1-to-1 ratio on the NYSE and by a 1-to-1 ratio on the Nasdaq.

The S&P 500 posted 21 new 52-week highs and two new lows, while the Nasdaq recorded 166 new highs and 14 new lows.