After a positive start and a subsequent retreat that resulted in a fairly long spell in negative territory on Monday, U.S. stocks recovered in afternoon trades and ended the day’s session on a mixed note.

The Nasdaq (NASDAQI:COMP) outperformed, settling at 16,828.67 with a gain of 93.65 points or 0.56 percent. The S&P 500 (SPI:SP500) edged up 5.89 points or 0.11 percent to finish at 5,283.40, while the Dow (DOWI:DJI) ended down 115.29 points or 0.3 percent at 38,571.03.

Data showing a contraction in the nation’s manufacturing activity in the month of May hurt sentiment.

A report from the Institute for Supply Management said manufacturing activity in the U.S. unexpectedly contracted at a slightly faster rate in the month of May, edging down to 48.7 in the month, from 49.2 in April. Economists had expected the index to inch up to 49.6.

The report also said the prices index slid to 57.0 in May from 60.9 in April, suggesting a slowdown in the pace of price growth.

On Wednesday, the ISM is scheduled to release a separate report on service sector activity in the month of May. The services PMI is expected to rise to 50.5 in May from 49.4 in April, with a reading above 50 indicating growth. Preliminary data from the U.S. Censuc Bureau showed US construction spending shrunk unexpectedly in April amid declines in both private and public construction.

The report said construction spending dipped 0.1% to $2,099.0 billion from the revised estimate of $2,101.5 billion in March. Spending was expected to grow 0.2 percent after a 0.2 percent decrease in March. The unexpected decrease by the headline index partly reflected a faster contraction in new orders, as the new orders index fell to 45.4 in May from 49.1 in April.

The production index also slipped to 50.2 in May from 51.3 in April, although a reading above 50 still indicates growth.

Meanwhile, the ISM said the employment index rose to 51.1 in May from 48.6 in April, indicating a rebound by employment during the month.

Several stocks from financial and energy sectors ended sharply lower.

Nvidia (NASDAQ:NVDA) shares gained nearly 5 percent, after the company unveiled next-generation AI chips.

Autodesk climbed about 4.6 percent. Moderna, Vertex Pharmaceuticals, Dollar Tree, Micron Technology, Starbucks, Biogen and Meta Platforms gained 2 to 4 percent.

Salesforce.com (NYSE:CRM) climbed about 2.75 percent. AstraZeneca, Warner Bros., Amazon, Merck, Boeing and American Express posted moderate gains.

Sirius XM, Walgreens Boots Alliancec, AMD, Old Dominion Freight Line and Baker Hughes ended sharply lower.

In overseas trading, Asian stocks rallied on Monday as soft U.S. inflation data revived rate cut hopes and a private survey showed China’s factory activity grew the fastest in about two years in May due to production gains and new orders.

European markets closed largely higher on Monday with investors picking up stocks, looking ahead to the European Central Bank’s monetary policy announcement due later in the week.

There are expectations that the ECB will deliver its first interest-rate cut of the cycle on Thursday.

The pan European Stoxx 600 climbed 0.32 percent. Germany’s DAX gained 0.6 percent, and France’s CAC 40 edged up 0.06 percent. The U.K.’s FTSE 100 ended down by 0.15 percent.

SOURCE: RTTNEWS