U.S. stocks ended lower on Monday as investors shifted gears after considering the possibility that the U.S. Federal Reserve may take longer to start cutting interest rates.

Traders are keeping a close eye on speeches by Fed officials this week, including Chair Jerome Powell on Tuesday, for any change in the central bank's rhetoric after data last week showed services activity was strong in January as well as strong job growth.

"We got that blowout jobs report, and people have had to reassess what the outlook for the Fed and the economy is. Tomorrow it will be interesting to see if Powell continues his transformation from hawk to dove," said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

U.S. Treasury Secretary Janet Yellen said on Monday the United States may avoid a recession as inflation is coming down while the labor market remains strong.

After taking a hit in 2022, U.S. equities have recovered strongly in 2023, led by megacap growth stocks amid short-lived hopes that the Fed will temper its aggressive rate hikes, which in turn could alleviate some pressure on equity valuations.

Money market participants now see the benchmark rate peaking at 5.1% by July, in line with what most policymakers have backed repeatedly.

Yield on the 10-year U.S. Treasury note extended gains to a four-week high.

On the corporate side, analysts expect quarterly earnings of S&P 500 firms to decline 2.8% in the fourth quarter, according to Refinitiv.

The Dow Jones Industrial Average ended down 35.85 points, or 0.11%, at 33,890.16, the S&P 500 lost 25.44 points, or 0.62%, to 4,111.04 and the Nasdaq Composite dropped 119.51 points, or 1%, to 11,887.45.

Volume on U.S. exchanges was 11.17 billion shares, compared with the 11.858 billion average for the full session over the last 20 trading days.

Tyson Foods Inc fell 4.6% after missing analysts' estimates for quarterly revenue and profit.

Miner Newmont Corp slid 4.5% on its $16.9 billion offer for Australian peer Newcrest Mining Ltd to build a global gold behemoth.

Contrary to the overall trend, Tesla Inc rose 2.5% after a U.S. jury on Friday found Chief Executive Elon Musk and his company were not liable for misleading investors when Musk tweeted in 2018 that he had "funding secured" to take the electric-vehicle maker private.

Meme stocks, such as AMC Entertainment and Gamestop , also gained steam late in the session, ending 11.8% and 7.2% higher, respectively.

U.S.-listed Chinese stocks such as Pinduoduo Inc fell 1.9% on geopolitical concerns after a U.S. military fighter jet shot down a suspected Chinese spy balloon off the coast of South Carolina on Saturday.

Most of the 11 major S&P 500 sector indexes were in the red, except for utilities and consumer staples.

Declining issues outnumbered advancing ones on the NYSE by a 3.37-to-1 ratio; on Nasdaq, a 1.98-to-1 ratio favored decliners.

The S&P 500 posted 5 new 52-week highs and 1 new low; the Nasdaq Composite recorded 79 new highs and 19 new lows. (Reporting by Shubham Batra and Johann M Cherian in Bengaluru and Carolina Mandl in New York Editing by Shounak Dasgupta and Matthew Lewis)