U.S. equities kicked off Monday trading slightly lower, slipping from records reached last week, while shares of Apple declined on a rare downgrade.
The S&P 500 fell 0.1 percent shortly after the open, with energy leading decliners. The Dow Jones industrial average dropped 12 points, with Apple contributing the most losses. The Nasdaq composite traded just below breakeven.
The Dow, S&P and Nasdaq closed at all-time highs on Friday, continuing a rally that has been largely led by technology stocks.
“The averages are making new highs but that’s because of a handful of stocks. If you take those out, we’d probably be lower,” said Peter Cardillo, chief market economist at First Standard Financial.
Microsoft, Apple, Amazon, Facebook and Alphabet Class have accounted for about a third of the gains in the S&P this year, leading the tech sector to a sharp 21.6 percent year-to-date gain.
Apple’s stock fell 0.8 percent after Pacific Crest analyst Andy Hargreaves downgraded the stock to sector weight from overweight. In a Sunday note, Hargreaves said the stock is not pricing in potential risks, like supply issues with the new iPhone 8.
“We believe AAPL anticipates strong performance in the iPhone 8 cycle, while providing relatively little weight to risks through the cycle or the potential for iPhone sales to decline in FY19,” he said.
Investors also kept an eye on Apple’s annual developers’ conference on Monday, where the company is expected to reveal new products.
In economic news, the IHS Markit U.S. services PMI for May is scheduled for release at 9:45 a.m. ET, while the May ISM nonmanufacturing index is slated for a 10 a.m. ET release.
Overseas, European stocks traded lower as investors digested a terrorist attack in London that killed at least seven people on Saturday night.
The FSTE 100 fell 0.2 percent, while the French CAC 40 dropped 0.7 percent. The pan-European Stoxx 600 index fell 0.2 percent.
U.K. Prime Minister Theresa May said that it’s time to step up the fight against Islamist extremism in the wake of the new attack. “It is time to say enough is enough,” she said.
—CNBC’s Silvia Amaro and John Melloy contributed to this report.
On tap this week:
Earnings: Coupa Software, Thor Industries
9:45 a.m. Services PMI
10:00 a.m. ISM nonmanufacturing
10:00 a.m. Factory orders
10:00 a.m. JOLTs
10:00 a.m. QFR
Earnings: Brown-Forman, ABM, Greif, Verint Systems
3:00 p.m. Consumer Credit
7:45 a.m. European Central Bank rate decision
8:30 a.m. News conference with ECB President Mario Draghi
8:30 a.m. Initial claims
10:00 a.m. QSS
Earnings: Ferrellgas Partners
10:00 a.m. Wholesale trade