This story was updated at 4:30 p.m. EDT.
Wall Street investors were cautious heading into the first trading day of the week as they reflect on tepid monthly consumer spending data. European markets were closed for Easter Monday. After starting the day lower, major U.S. markets ended the day mixed and hovering around flat.
San Francisco Fed President John Williams said Monday before markets opened that while he had little concern over the economy, global conditions are preventing the U.S. from normalizing interest rates.
"The real issue is the global financial and economic developments, there's uncertainty about what's happening around the world and how that feeds back to the dollar and the U.S. economy," he told CNBC’s "Asia Squawk Box."
"The data to me isn't so much about the labor market continuing to improve, I'm very positive on that, it's more about inflation moving back to 2 percent in the context of very strong headwinds,” Williams said.
Fed Chair Janet Yellen was scheduled to speak Tuesday in New York, and investors will look for hints on whether a rate hike will take place next month.
The Dow Jones Industrial Average (INDEXDJX:.DJI) closed up 19.66 points Monday, or 0.11 percent, to 17,535. The broader Standard & Poor’s 500 index (INDEXSP:.INX) gained 1.11 points, or 0.05 percent, to 2,037. The Nasdaq composite (INDEXNASDAQ:.IXIC) fell 6.72 points, or 0.14 percent, to 4,767.
Six out of the 10 S&P 500 sectors closed up Monday led by consumer discretionary and materials stocks. Energy shares were leading declines. General Electric Co. (NYSE:GE) led Dow advances while Microsoft Corp. (NASDAQ:MSFT) led declines.
The U.S. Commerce Department said before markets opened that the Fed’s preferred measure of consumer prices remained the same in February as it was the previous month as low global commodity prices and a strong dollar, pushed by global economic conditions, continue to weigh on preferred U.S. inflationary growth.
"We have a domestic mandate,” Williams said. “But … we understand that we're in a global economy so what happens in Brazil or China has a huge impact on the U.S. in terms of our inflation and employment goals."
Data released Monday morning by the U.S. Department of Commerce showed a widely watched price index on consumer spending dipped 0.1 percent after gaining by the same amount in January. In the 12 months through February the so-called core personal consumption expenditures (PCE) price index increased by 1.7 percent, holding steady from the prior month, which showed the fastest pace since July 2014. The number remains below the Fed’s preferred minimum 2 percent annualized growth.
The core PCE, which excludes volatile food and energy prices, has been stubbornly low thanks in part to the U.S. dollar’s strength and the knockoff effect of low oil prices on keeping the cost of goods lower than they would otherwise be.
Last month, consumer spending increased by a slight 0.1 percent in February after a downwardly revised 0.1 percent increase a month earlier. Consumer spending, which accounts for as much as 70 percent of the U.S. economy, was previously reported to be 0.5 percent in the first month of the year. Consumer spending was in line with the average forecast by economists polled by Thomson Reuters. Personal income rose 0.2 percent last month after growing 0.5 percent in January.
Oil prices erased slight early trading gains amid low Easter holiday trading. Prices have edged up in recent weeks on optimism global producers would soon implement output freezes to begin stabilizing prices.
U.S. West Texas Intermediate fell 0.23 percent to $39.37 after topping $40 earlier this month week for the first time since early December. Brent crude, the other major global oil-price benchmark, dropped 0.42 percent to $40.27.
The benchmark U.S. 10-year Treasury fell to 1.89 percent early Monday, down from Thursday’s settle of 1.90 percent. The bond yield typically rises when investors are more confident about the markets and falls when concerns flare and demand for U.S. debt increases. Gold, another so-called safe harbor investment, fell 0.14 percent Monday to $1,219.90 per troy ounce. Gold prices tend to rise as confidence in the markets falls.
Asian stocks closed mostly lower Monday, surrendering gains earlier in the day.
China’s broad CSI 300 Index of the mainland’s largest companies closed down 0.88 percent. Hong Kong’s Hang Seng lost 1.31 percent. Australia’s S&P/ASX 200 fell 1.13 percent. South Korea’s main Kospi Index shed 0.06 percent.