04:56 PM EDT, 08/26/2024 (MT Newswires) -- The Dow Jones Industrial Average closed at an all-time high while the S&P 500 and the Nasdaq Composite dropped Monday following a rally in the previous session that came as Federal Reserve Chair Jerome Powell indicated policymakers are ready for interest rate cuts.

The Dow advanced 0.2% to 41,240.5. The Nasdaq fell 0.9% to 17,725.8, while the S&P 500 declined 0.3% to 5,616.8. Technology saw the steepest decline among sectors, while energy led the gainers.

The "time has come" for monetary policy easing, Powell said Friday at the annual economic symposium in Jackson Hole, Wyoming, adding that the timing and extent of rate cuts will depend on incoming data.

Equity markets closed higher Friday.

"Recent data have been a touch weaker than the Fed had expected, but not dramatically so," Morgan Stanley said in a note e-mailed Monday. "We maintain our view that the cutting cycle will start with and continue with (25-basis-point) cuts... but a substantially weaker job market would mean bigger or more cuts."

Separately, Oppenheimer Asset Management said in a note that Powell's signal to pivot to rate cuts was likely supported by a recent downward revision to the Bureau of Labor Statistics' annual jobs growth data.

West Texas Intermediate crude oil jumped 2.9% to $77.03 a barrel. Prices increased following reports of new production outages in Libya, igniting regional supply concerns, D.A. Davidson said in a note to clients.

"A preemptive Israeli strike on Hezbollah over the weekend has raised concern about the Middle East once again," ING said in a Monday report. "We would expect any rally on the back of these developments to be rather short-lived except if Iran were to become more directly involved, as this would raise oil supply risks more meaningfully."

The US two-year yield rose 2.3 basis points to 3.94% Monday, while the 10-year rate added 1.1 basis points to 3.82%.

In economic news, US durable goods orders rebounded more than expected in July as defense and civilian aircraft returned to positive territory, government data showed.

Texas manufacturing activity improved more than expected this month into shallower contraction territory as production and shipments swung positive, according to the Dallas Fed.

In company news, PDD's (PDD) US-listed American depositary receipts plunged nearly 29%, the worst performer on the Nasdaq, after the Chinese e-commerce platform's second-quarter revenue fell short of market estimates. The company expects competition and external challenges to impact its future results.

Super Micro Computer ( SMCI ) saw the steepest decline on the S&P 500 and the second-biggest on the Nasdaq, down 8.3%.

Starbucks ( SBUX ) shares rose 1.7%, among the best performers on the Nasdaq. The coffee giant's newly appointed chief executive, Brian Niccol, could identify same-store sales drivers via throughput improvement and other measures, though separating the company's international business is unlikely to prove accretive to shareholder value, Oppenheimer said in a note to clients.

Gold increased 0.3% to $2,554.40 per troy ounce, while silver gained 0.4% to $29.95 per ounce.