US Stocks Drift Lower Amid Inflation Concerns and Government Debt

US stock markets drifted lower on Monday as investors await a week packed with potentially market-moving events. The S&P 500 slipped 0.3% and pulled back from its all-time high set earlier this month, while the Dow Jones Industrial Average rose by 49 points or 0.1%. Tech stocks led the decline, dragged down by Nvidia's 0.7% drop.

The tech giant is set to report its latest quarterly earnings on Wednesday, which could dictate the next big move for AI-related stocks. The company has been a beneficiary of the AI boom and has become Wall Street's largest and most influential stock due to it.

However, the bond market remains a key factor in the markets' performance. Longer-term Treasury yields climbed through the summer on concerns about high inflation, government debt, and other factors, making borrowing more expensive for everyone. The US Treasury Department announced a surprise move last week to increase the size of planned buybacks of Treasurys, which could help ease the rise in yields.

Despite this, analysts warn that the move may have only a limited effect due to its small size and failure to address the fundamental problems of high debt for the US government and expensive oil prices. The 10-year Treasury yield eased to 4.70% on Monday from 4.74% late Friday.

The Federal Reserve's new chairman, Kevin Warsh, is set to deliver a speech at an economic symposium in Jackson Hole, Wyoming on Friday. Investors are unsure of what they may get from Warsh this time around, as he has insisted that he wants to give financial markets fewer clues about what the Fed will do with interest rates.