US STOCKS-Dow, S&P dip after strong week, investors gauge Fed rate path

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Advancing chipmakers help lift Nasdaq

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Walt Disney gains after Barclays upgrade

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Boeing CEO to step down in shakeup amid safety crisis; shares up

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Indexes: Dow down 0.4%, S&P off 0.13%, Nasdaq up 0.5%

(Updated at 2:15 p.m. ET/ 1815 GMT)

By Chuck Mikolajczak

NEW YORK, March 25 (Reuters) -

The Dow and S&P 500 slipped on Monday, the first session after the biggest weekly percentage gains for the indexes this year, as investors assessed the likely path of interest rates from the Federal Reserve ahead of key inflation data due later in this holiday-shortened week.

Last week, the Fed maintained its guidance for three interest-rate cuts this year, and the S&P 500 and Dow had strong gains while the Nasdaq notched its biggest weekly percentage gain since mid-January.

On Monday, Chicago Fed President Austan Goolsbee said he had penciled in three rate cuts for this year, while Fed Governor Lisa Cook said the central bank needs to proceed with caution as it decides when to start cutting interest rates.

"It's a breather, the market has held really well, so people are waiting, there’s a lot of people waiting for that pullback," said Joe Saluzzi, partner, co-founder and co-head of equity trading at Themis Trading in Chatham, New Jersey.

"What the Fed did was give the all clear for now, it's really interesting what they are doing. They're not cutting anything yet they just keep delaying it and the market is fine with that... but they're doing a good job right now of saving the bullets when they need them."

The Dow Jones Industrial Average fell 155.93 points, or 0.40%, to 39,319.97, the S&P 500 lost 6.73 points, or 0.13%, to 5,227.45 and the Nasdaq Composite gained 7.30 points, or 0.05%, to 16,436.71.

Economic data showed sales of new U.S. single-family homes fell unexpectedly in February after mortgage rates increased during the month, but the underlying trend remained strong amid a chronic shortage of previously owned houses on the market.

The Nasdaq eked out a small gain thanks to a turnaround in semiconductor stocks. Chip shares were initially weaker after a report over the weekend said

China had introduced guidelines

to phase out U.S. microprocessors supplied by Intel and AMD from government personal computers and servers.

The Philadelphia Semiconductor Index rose 0.5%, led by a 8.46% surge in Micron Technology to a record high, while industry heavyweight Nvidia climbed 1.89%.

Intel was down 1.15% while AMD, erasing earlier declines, was up 0.66%.

Expectations for a rate cut from the Fed in June are again increasing, with markets now pricing in a 71.9% chance for a cut of at least 25 basis points (bps), according to CME's FedWatch Tool, up from around 54.7% a week ago.

The crucial February reading of the Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, is due on Friday, when U.S. markets will be shut for the Good Friday holiday.

A hot reading for the PCE index could dent market optimism around early rate cuts.

Boeing pared gains and was last up 1.39% after it announced a broad management shakeup and said CEO Dave Calhoun would step down from his position at the end of 2024.

Walt Disney gained 2.43% after Barclays upgraded the stock to "overweight" from "equal weight".

Declining issues outnumbered advancers on the NYSE a 1.03-to-1 ratio while on the Nasdaq declining issues outnumbered advancers by about a 1.08-to-1 ratio.

The S&P 500 posted 31 new 52-week highs and 2 new lows while the Nasdaq recorded 107 new highs and 96 new lows.

(Reporting by Chuck Mikolajczak; Editing by David Gregorio)