US STOCKS-Wall Street mixed as US-China trade talks begin

By Kanchana Chakravarty and Sukriti Gupta

June 9 (Reuters) - Wall Street's main indexes were mixed on Monday as investors watched a fresh round of U.S.-China negotiations aimed at mending a trade rift that has rattled financial markets for much of the year.

Top officials from both countries have kicked off discussions at London's Lancaster House, looking to address disagreements around a preliminary trade agreement struck last month that had briefly cooled tensions between the world's largest economies.

The meeting, which could run into Tuesday, comes four days after U.S. President Donald Trump and Chinese leader Xi Jinping spoke by phone, their first direct interaction since Trump's January 20 inauguration.

The leaders had, however, left key issues unresolved.

"The talks will have to go on for some time before we decide whether or not there's actual progress being made. However, most investors remain hopeful that there will be some positive results," said Peter Andersen, founder at Andersen Capital Management.

White House economic adviser Kevin Hassett told CNBC in an interview on Monday the U.S. trade negotiators are seeking a handshake in London to seal an agreement struck by Trump and Xi to allow the export of China's rare earth minerals and magnets to the United States.

Hopes of more trade deals between the U.S. and its major trading partners, along with upbeat earnings and tame inflation data, helped U.S. equities rally in May, with the S&P 500 and the tech-heavy Nasdaq .IXIC notching their best monthly gains since November 2023.

The S&P 500 remains a little more than 2% below all-time highs touched in February, while the Nasdaq is about 3% below its record peaks reached in December.

Major data releases this week include readings on May consumer prices and initial jobless claims. While investors widely expect the Federal Reserve to keep interest rates unchanged next week, focus will be on any signs of pick-up in inflation as Trump's tariffs risk raising price pressures.

At 10:06 a.m. ET the Dow Jones Industrial Average .DJI fell 129.75 points, or 0.30%, to 42,633.12, the S&P 500 .SPX lost 0.32 points, or 0.01%, to 6,000.04 and the Nasdaq Composite .IXIC gained 44.81 points, or 0.23%, to 19,574.76.

Seven of the 11 major S&P 500 sub-sectors fell, with healthcare stocks .SPXHC, down 0.6%, declining the most. On the flip side, information technology stocks .SPLRCT advanced 0.6%.

Most megacap and growth stocks were mixed. Tesla TSLA.O shares edged 0.5% lower after brokerage Baird downgraded the stock to "neutral". Nvidia NVDA.O gained 1.3%.

Warner Bros Discovery WBD.O shares jumped 9.5%, the most on the S&P 500, after the company said it would separate its studios and streaming business from its fading cable television networks.

Robinhood Markets HOOD.O fell 7.4% after S&P Dow Jones Indices left S&P 500 constituents unchanged in its latest rebalancing, following recent speculation that the online brokerage would be added to the benchmark index.

Merck MRK.N rose 1.1% after the drugmaker's oral cholesterol pill succeeded in two late-stage studies.

Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the NYSE and by a 1.44-to-1 ratio on the Nasdaq.

The S&P 500 posted 10 new 52-week highs and one new low while the Nasdaq Composite recorded 63 new highs and 27 new lows.