The S&P 500 closes lower on Monday, retreating from record, as rally pauses: Live updates

U.S. stocks ended Monday's trading session in the red.

The Dow Jones Industrial Average fell around 62 points, or 0.16%.

The S&P 500 and Nasdaq Composite dropped 0.38% and 0.13%, respectively.

— Hakyung Kim

Shares of Alphabet declined 4% Monday amid growing criticism of its image-generation AI tool on Gemini.

Over the past week, users discovered historical inaccuracies and questionable responses from the image generator, which have circulated widely on social media.

Google DeepMind CEO Demis Hassabis announced Monday that the company has temporarily taken the feature offline to address the concerns.

— Hakyung Kim, Hayden Field

Stocks tied to the price of bitcoin surged in late afternoon trading as the cryptocurrency shot above the $54,000 level for the first time since December 2021.

Coinbase rocketed higher by 17%, while Microstrategy jumped 16%. Riot Platforms and Marathon Digital, the largest bitcoin miners, soared 16% and 22%, respectively.

Most of the crypto market got a lift from bitcoin. Ether gained more than 2% to trade at $3,173.08. Solana and Cardano's ADA token advanced about 4% each, while Polygon's MATIC token rose 7%.

Bitcoin traded flat in the week leading up to Monday morning, when the breakout began and put it on track for a 27% monthly gain.

— Tanaya Macheel

Walgreens Boots Alliance shares struggled on Monday, its first session not being in the Dow.

Shares dropped more than 3% in afternoon trading, while the broad S&P 500 inched down just 0.2%. Monday marked the first day with Walgreens replaced by e-commerce giant Amazon in the blue-chip average.

Monday's slide adds to an already tough period for Walgreens. The stock has tumbled nearly 20% in 2024 after losing slightly over 30% in the prior year.

— Alex Harring

Bank of America's annual survey of Merrill financial advisors indicated a significant decline in recessionary fears and an uptick in bullish sentiment, strategist Savita Subramanian wrote in a Friday note.

Just 4% of the survey's 240 respondents expect a U.S. recession this year, compared to 85% of respondents last year, the strategist said. Just over half of surveyed financial advisors expect a soft landing, while 31% expect above-trend GDP and disinflation, with the remaining individuals calling for a pickup in inflation. Advisors also expect three rate cuts this year, and 77% said they think the bull market will continue beyond 2024, Subramanian pointed out.

The advisors also expressed the most bullish three-month outlook on equities since 2021, according to the survey, which was conducted between Jan. 31 and Feb. 14.

"Equity allocations rose 2ppt YoY to 59%...but remain below 2017-22 levels amid higher bond and cash allocations," Subramanian said. "Cash allocations remain high at 10% (flat YoY) as cash yield remains attractive. Since the end of 2021, cash yields have steadily increased, but if this year sees peak short rates as our economists expect, we could see inflows into equity income."

— Pia Singh

JPMorgan Chase CEO Jamie Dimon told CNBC's Leslie Picker that artificial intelligence is more than just a fad and will become part of the daily reality for many workers going forward.

"This is not hype. This is real. When we had the internet bubble the first time around, ... that was hype. This is not hype. It's real," Dimon said. 

Watch the full interview here.

— Jesse Pound

Jamie Dimon, the CEO of JPMorgan Chase, isn't all too concerned about the threat that could be posed if Capital One takes over Discover Financial in a $35.3 billion deal.

If the deal is approved by regulators, JPMorgan would lose its standing as the nation's biggest credit card lender.

"My view is, let them compete," he told CNBC's Leslie Picker at a Miami conference. "Let them try, and if we think it's unfair we'll complain about that."

Whether or not the deal will ultimately materialize is still up in the air. On Sunday, over a dozen Democrat lawmakers signed a letter to the Biden administration urging it to block the proposed deal.

"To protect consumers and financial stability, we urge you to block this merger and strengthen your proposed policy statement to prevent harmful deals in the future," the lawmakers, led by Sen. Elizabeth Warren, wrote.

— Lisa Kailai Han

The S&P 500 has posted 15 positive weeks out of the last 17 for only the second time in half of a century, according to Deutsche Bank.

The broad index finished last week higher by 1.7%. With that gain, the S&P 500 notched its 15th winning week out of the most recent 17.

That's the first time since 1989 and only the second time in 50 years, per Deutsche macro strategist Henry Allen. For cultural reference, 1989 was the year that "Dead Poets Society" premiered in theatres and Madonna's hit song "Like a Prayer" was released.

If the benchmark index ends this week higher again, that would bring its track record to 16 positive weeks of the last 18. That would be a first since 1971, just before the end of the Bretton Woods system for money management. 1971 was also notable for the Pentagon Papers, the ratification of the 26th Amendment lowering the voting age to 18 and the launch of Apollo 15.

— Alex Harring

Check out the companies making headlines in midday trading.

• Berkshire Hathaway — Berkshire's Class B shares dipped 1.2% in intraday trading. Earlier in the session, the conglomerate's stock reached all-time highs, following strong operating earnings in its fourth quarter.
• R1 RCM — Shares surged 28% after major holders of the health-care payment tech company indicated that they have been weighing strategic alternatives, including taking R1 RCM private, according to a filing with the Securities and Exchange Commission.
• Freshpet — Shares surged 16%. The pet food company posted fourth-quarter adjusted earnings before interest, taxes, depreciation, and amortization of $31.3 million, topping the FactSet consensus estimate of $27.4 million. Revenue of $215.4 million was above the $204.6 million.

Read the full list here.

— Sarah Min

While small caps continue to trail the S&P 500 as the broad market index reached new highs last week, Oppenheimer analyst Ari H. Wald says the sector could be set for a breakout.

"From a glass-half-full perspective, the small-cap divergence also provides potential for a small-cap breakout and, in turn, the cycle's long-awaited broad-based breakaway," Wald wrote in a Feb. 24 note.

"Overall, rather than the challenging task of selling the market right and then buying it back right too, we believe portfolio selection should prove rewarding," he added.

The Russell 2000 has slipped roughly 0.4% from the start of 2024, while the S&P 500 has climbed nearly 7%.

— Brian Evans

After the S&P 500 and Dow Jones Industrial Average reached fresh records during Friday's trading session, Barclays forecasts some consolidation ahead.

"With last week's driver (Nvidia earnings) behind us, the risk rally should take a breather from the frantic pace of recent weeks," global chairman of research Ajay Rajadhyaksha wrote in a Monday note.

The overall U.S. strength of the U.S. economy remains an outlier compared to other major economies, Rajadhyaksha added.

— Hakyung Kim

With just a few days left in February's trading month, utilities stocks are shaping up to be the sole market laggard.

The S&P 500 sector has shed more than 1.4% in February, making it the only of the 11 sectors that comprise the broad index on track to end the month in the red. By comparison, the S&P 500 as a whole is slated to end the month up by more than 2.5%.

AES and NextEra Energy have led the sector down this month, with both stocks dropping more than 6%. American Water Works was the next biggest loser, slipping more than 5% in February.

Those losses erased notable gains seen elsewhere in the sector. Notably, Constellation Energy has climbed more than 10% in the month, while Eversource Energy has rallied more than 7%.

February's trading month concludes with Thursday's closing bell.

— Alex Harring

Investors may be growing more confident that the market rally can broaden out from here, if fund flows are an indication.

The iShares Russell 2000 ETF (IWM), one of the most popular ways to gain exposure to small cap stocks, brought in $1.4 billion of net inflows over the past week, according to FactSet. That is third most among U.S. ETFs.

The inflows are a notable shift, as the IWM still has net outflows of about $5 billion since the start of 2024.

Some of the money may be coming from investors taking profits in big tech stocks, as the Invesco QQQ Trust (QQQ) saw nearly $3.5 billion in outflows over the past week.

— Jesse Pound

Energy was the top-performing S&P 500 sector Monday, rising 0.6%.

Marathon Petroleum and Valero Energy led the sector's gains, with both stocks 2.8% higher.

Information technology and consumer discretionary were the only other sectors in the green, up 0.4% and 0.5%, respectively.

Meanwhile, the utilities sector led the broad market's slip. Dominion Energy, AES and PG&E all lost 2.7% and more.

— Hakyung Kim

The ProShares Online Retail ETF is up nearly 12% since the start of February and on pace for its best month since January 2023, when it surged more than 27%.

The biggest leaders in the fund include Carvana, Beyond, WIlliams-Sonoma, Coupang, Revolve and Amazon, which have gained more than 10% each. Carvana is the biggest monthly gainer and up about 68%.

Amazon is up about 13% month to date and headed for its best month since May 2023.

— Samantha Subin, Gina Francolla

Starting Monday, Uber Technologies is replacing JetBlue Airways in the Dow Jones Transports Index.

This change to the 20-stock index will increase its exposure to the ride-sharing market. The decision was released on Feb. 20, the same day Amazon's inclusion in place of Walgreens Boots Alliance to the Dow Jones Industrial Average was announced.

Uber is the best-faring stock in the Dow Transports index on a 12-month basis. The ride-share company has rallied 132.4% in the period. The next-best performer, Matson, has gained 68.7%.

Dow Transports slipped around 0.4% Monday. The index has underperformed the broader market in 2024; it has dropped 0.2%, compared to the S&P 500 and Dow Industrials' gains of 6.6% and 3.8%, respectively.

— Hakyung Kim, Robert Pisani

Factory activity in Texas bounced back in February after hitting its lowest level since mid-2020 the previous month, the Dallas Federal Reserve reported Monday.

The Texas Manufacturing Outlook Survey rose 16 points to a reading of 1, representing the percent difference between companies seeing expansion versus contraction. A number above zero indicates expansion.

Gauges of new orders, employment and prices all showed improvement on the both. The business conditions index remained sharply negative at -11.3, though it was better than January's -27.4.

—Jeff Cox

The U.S. economy has managed to remain strong in spite of interest rate hikes. This comes in stark contrast to other major global economies and their equity markets, according to Seema Shah, chief global strategist of Principal Asset Management.

"Amidst the backdrop of an unprecedented central bank rate hiking cycle, the resilience of the U.S. economy stands as a beacon of stability. By contrast, the UK and Japan grapple with technical recessions, the Euro area remains mired in stagnation, and China contends with deflationary pressures," Shah said in a Monday note.

Since the start of the pandemic in 2020, the S&P 500 has gained 57%, per Shah. Meanwhile, the Eurostox 600 and UK FTSE 100 are up just 20% and 2%, respectively. China's CSI 300 Index has declined 15% during this period.

"As overweight exposure to the technology sector continues to bolster earnings expectations, the enduring strength of the U.S. economy should continue to drive outperformance in markets," added Shah.

— Hakyung Kim

Sales of new single-family homes rose less than expected in January as mortgage interest rates remained elevated.

New home sales totaled 661,000 for the month, an increase of 1.5%, according to seasonally adjusted numbers the Census Bureau and Department of Housing and Urban Development released Monday. The total missed the Dow Jones estimate for 680,000 and 2.4% respectively.

The median sale prices was $420,700 while the average price was $534,300. Inventory totaled 456,000, equivalent to 8.3 months of supply.

—Jeff Cox

U.S. stocks started Monday's trading session little changed.

The Dow Jones Industrial Average ticked down 5 points, or 0.01%.

The S&P 500 and Nasdaq Composite added 0.07% and 0.28%, respectively.

— Hakyung Kim

It's been a strong earnings season so far for corporations, but JPMorgan believes that these good fortunes might take a turn in the near future.

"The earnings reality might turn out to be the opposite as we move through the year," wrote strategist Mislav Matejka, who listed three key drivers that might indicate that corporate profitability is due to turn weaker.

First of all, Matejka believes that corporations were able to benefit from a lower net interest expense this economic cycle. While this condition will drive outperformance through the first half of this year, the strategist wrote that this "rather counter-intuitive development is set to normalize as time passes."

Matejka also hinted at strong COVID-induced pricing power driving strong topline for companies. But going forward, he expects earnings to slide as the producer price index turns negative.

Finally, the analyst underscored last year's strong U.S. economic activity, but noted that unit labor costs could pick back up this year.

"Profit margin proxy, corporate deflator minus ULCs, could turn into more of a headwind," he wrote. "Putting the above 3 together, one might end up with a disappointing profits outcome even without seeing an outright recession, and we note that 2024 EPS projections keep coming down in key regions."

— Lisa Kailai Han

Check out some of the companies making headlines in premarket trading.

• Domino's Pizza -- Shares surged more than 6% after the restaurant chain said it will raise its dividend by 25% and increase its buyback program by an additional $1 billion. The increased dividend will be payable on March 9, while the additional stock repurchase was cleared to begin at the conclusion of the fourth quarter on Feb. 21.

• HashiCorp — Shares of the software company popped 8% on the back of an upgrade by Morgan Stanley to overweight from equal weight. The bank said HashiCorp should benefit from a resurgence in cloud initiatives.

• Berkshire Hathaway — Class B shares of Warren Buffett's conglomerate climbed nearly 3% on the back of a nearly 30% year-over-year surge in operating earnings for the fourth quarter. Berkshire's cash hoard also swelled to record levels.

Read the full list here.

— Brian Evans

Amer Sports shares popped more than 3% before the bell Monday after multiple Wall Street analysts provided optimistic outlooks following its initial public offering.

The Wilson and Arc'teryx parent debuted on the New York Stock Exchange earlier this month. In recent days, several analysts have come out with bullish calls on the stock.

"We view AS as a compelling portfolio of premium, innovation-led brands with healthy growth opportunity," Goldman Sachs analyst Brooke Roach wrote in a Sunday note to clients. "The company has significant scope for profitable growth and margin expansion."

CNBC Pro subscribers can read the full story here.

— Alex Harring

Effective Monday, Amazon is a part of the Dow Jones Industrial Average. The online retailer is replacing Walgreens Boots Alliance.

The index change increases the Dow's exposure to technology.

Shares of Amazon inched up 0.3% Monday during premarket trading. The 30-stock Dow ticked down 0.1%.

— Hakyung Kim

Class B shares of Berkshire Hathaway were up more than 3% after the Warren Buffett-led conglomerate posted strong fourth-quarter results.

The company's operating earnings surged 28% year over year to $8.481 billion for the quarter, led by strong gains in insurance. Berkshire also reported a record cash hoard of $167.6 billion.

— Fred Imbert

Hong Kong-listed shares of Xiaomi fell 1% in midday trading Monday amid a broader decline in shares of electric vehicle makers.

The Chinese smartphone company said it has identified a consumer niche that will pay up for its upcoming electric car.

"We think it's a good starting point for us in the premium segment because we have already 20 million premium users in China based on the smartphone," Weibing Lu, Xiaomi Group President told CNBC ahead of the car's international reveal at the Mobile World Congress in Barcelona, which starts Monday.

"I think the initial purchases will be very overlapped with the smartphone users," Lu said.

Shares of Chinese EV maker Nio fell nearly 5%, while Xpeng shed nearly 1%. Hong Kong's Hang Seng index fell 0.7% by midday trading.

— Shreyashi Sanyal, Evelyn Cheng

South Korea's financial regulatory body announced steps to better corporate governance on Monday, taking a leaf out of Japan's playbook, to boost its undervalued stock markets and address the "Korea discount."

Korea's Financial Services Commission provided details on its "Corporate Value-up Program," which aims to prioritize shareholder returns through various incentives including tax benefits.

Korean authorities acknowledged the similarities in its program with that of Japan's, which has seen Tokyo markets hitting record highs for the first time in 34 years.

The FSC said it will also introduce the "Korea Value-up Index" for institutional investors, including pension funds.

— Shreyashi Sanyal

Veteran investor David Roche, would rather invest in India, Indonesia and Japan rather than China.

"It's certainly where I would have more money than I would in China at the moment," the president of Independent Strategy told CNBC's "Squawk Box Asia" when asked about prospects for India and Indonesia. "I would also, by the way, still have more money in places like Japan than I would in China," he added.

Roche noted that there are plenty of companies in China which are "fundamentally cheap," but major problems such as deflation still plague the economy. Still, Roche said Chinese markets could be in for a bounce.

"When markets fall as much as China has done, they're in for a bounce," he said.

—Lee Ying Shan

China is still a critical trading partner for many countries across the world, and the often-used narrative of the superpower being delinked from the global economy is overdone, says the Asian Development Bank. 

"China's still probably the number one trading partner for the majority of countries in the world," ADB's Chief Economist Albert Park told CNBC. "The story of China being delinked from the global economy — I think those are probably generally very overdone or very partial."

The economic powerhouse remains a top trading partner to over 120 countries, and is still the largest trading partner to Japan, South Korea, Taiwan and Vietnam, according to U.S. think tank Wilson Center.

China also continues to play an outsized role in the global economy as the world's largest trading economy even with trade tensions between China and the U.S. festering since 2018.

—Lee Ying Shan

U.S. equity futures opened in the red on Sunday night.

Futures tied to the S&P 500 were lower by 0.16% and Nasdaq 100 futures fell 0.23%. Dow Jones Industrial Index futures were just under the flat line.

— Tanaya Macheel