U.S. stocks are drifting as the world’s two largest economies begin talks on trade that could help avoid a recession.

The S&P 500 was little changed in early trading Monday. The Dow Jones Industrial Average slipped 79 points, or 0.2%, and the Nasdaq composite was up 0.1%.

Officials from the U.S. and China are meeting in London to talk about a range of disputes. Hopes that President Donald Trump will lower his tariffs after reaching trade deals with countries around the world have helped send the S&P 500 surging in recent weeks.

Warner Bros. Discovery jumped after saying it would split into two companies.

The benchmark S&P 500 closed above 6,000 on Friday for the first time since Feb. 21, following a better-than-expected jobs report and a rebound in Tesla's shares.

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 notching their best monthly gains since November 2023.

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

Citigroup joined major brokerages in raising its year-end target for the S&P 500, citing renewed optimism in corporate earnings resilience and the accelerating momentum of artificial intelligence-driven growth. It sees the benchmark ending the year at 6,300, compare with 5,800 forecast previously.

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.

Traders currently expect nearly two rate cuts by the end of this year, with the first cut seen in September, according to data compiled by LSEG.

Most megacap and growth stocks were mixed in premarket trading. Tesla shares fell 2.5% after a report said Baird downgraded the stock to "neutral" from "outperform."

Shares of Sunnova Energy slumped 37% after the company filed for Chapter 11 bankruptcy protection.

Robinhood Markets fell 5.2% after the S&P 500's decision to not change index constituents as part of its latest rebalancing, contrary to some analysts who had expected the online brokerage to join the benchmark index.