Megacaps boost Nasdaq in choppy trade; jobs data in focus

Semiconductor stocks such as Advanced Micro Devices, Arm Holdings and Micron Technology fell between 1% and 4%, pulling the Philadelphia SE Semiconductor index to a near one-week low.

Real estate stocks, also seen as a bond proxy, dropped 1.5%. As U.S. Treasury yields hit multi-week highs, the S&P 500 banks index jumped to a more than one-month peak. JP Morgan Chase shares were at an all-time high.

With the equity market shut on Thursday for U.S. Independence Day, trading is expected to be volatile in thin volumes during the week.

Manufacturing PMI data from the Institute for Supply Management showed manufacturing contracted for a third straight month in June, while prices paid dropped to a six-month low in an encouraging sign for the U.S. Federal Reserve's battle with inflation.

"While manufacturing is contracting, the rest of the economy is in decent shape ... the Fed wants the economy to keep running in low gear near-term. They will see ongoing softness in manufacturing as contributing to their goal of less inflation," Bill Adams, chief economist for Comerica Bank, said.

Traders have stuck to their bets of around two interest rate cuts this year, starting from September, LSEG FedWatch showed.

Also scheduled for the week are JOLTS job openings data on Tuesday, and ADP employment, factory orders, ISM services PMI data and minutes of the Fed's latest policy meeting on Wednesday. Non-farm payroll data is due on Friday.

Fed New York President John Williams noted he continues to believe price pressures are moderating back to the 2% target.

At 11:58 a.m. ET, the Industrial Average was up 35.06 points, or 0.09%, at 39,153.92, the S&P 500 was up 2.47 points, or 0.05%, at 5,462.95, and the Nasdaq Composite was up 61.29 points, or 0.35%, at 17,793.89.

The Nasdaq and the S&P 500 notched their third quarterly gains on Friday, with the tech-heavy index doing so for the first time in three years. However, the Dow's quarterly decline has raised concerns about the need for greater diversification in investor holdings.

Spirit AeroSystems gained 3.4% following Boeing's deal to buy back the fuselage supplier for $4.7 billion in stock. Boeing's shares rose 3%.

Chewy dropped 6.1%, reversing sharp early gains, after stock influencer Keith Gill, also known as "Roaring Kitty", disclosed a 6.6% stake in the pet products retailer.

Declining issues outnumbered advancers for a 2.19-to-1 ratio on the NYSE and for a 1.72-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and three new lows, while the Nasdaq recorded 31 new highs and 92 new lows.