U.S. stocks traded mixed on Monday as investors awaited signs of a further rebound in corporate profits with the start of second-quarter earnings season this week.

The Dow dropped to pull back from Friday's record closing high. The S&P 500 also hovered just below an all-time high. The Nasdaq gained to reach a new record intraday high, however, as technology stocks outperformed. The 10-year Treasury yield steadied around 1.35%, recovering after dipping to a five-month low of below 1.3% last week.

Major companies will begin releasing their second-quarter results beginning on Tuesday with the big banks JPMorgan Chase (JPM) and Goldman Sachs (GS). With results fueled by strengthening consumer demand as pandemic-related restrictions eased early this year, S&P 500 companies are expected to see aggregate earnings grow by 64% over last year, according to FactSet. This would accelerate from the first quarter's growth rate of about 50% and mark the fastest pace for the index since 2009. 

According to Goldman Sachs strategist David Kostin, investors should be focused on three main questions for companies heading into earnings season: How firms will maintain profit margins given rising input costs and supply chain shortages, how companies plan to prioritize cash spending, and how policy uncertainties especially around taxes affect their outlooks. 

"Global shipping woes, raw material inflation as well as acute shortages in both labor and semiconductors have combined to increase costs for companies across the economy, " Kostin wrote in a note on Monday. "Investors have started to reward companies with attractive margin profiles." 

In addition to earning season, this week will also see Federal Reserve Chair Jerome Powell testify before Congress with his semi-annual Monetary Policy Report on Wednesday and Thursday. Pundits expected the central bank leader to strike a more dovish tone on the economic recovery and monetary policy compared to his other recent public remarks, given the mixed June jobs report out earlier this month and last week's Fed minutes showing a central bank divided on the topic of tapering. Additional economic reports on consumer price inflation and retail sales out this week are also expected to underscore an economic recovery capped by supply and demand imbalances and elevated inflation during the reopening. 

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"I think the recovery is on track, it's really just the rate of change that has slowed," Kathy Jones, Charles Schwab chief fixed income strategist, told Yahoo Finance. "And we couldn't continue to grow at 9% to 10% GDP growth every quarter, so obviously it's going to slow down."

"I think one of the things that got into markets that got [Treasury] yields tumbling was maybe the fact that the Fed was going to hike rates sooner than anticipated," she added. "That sends a signal to the long end of the bond market that maybe the Fed isn't going to tolerate higher inflation for longer and that they're going to step on the brakes sooner rather than later … we don't think that's going to be the case though. We think the economy's doing well, yields will probably bounce back." 

9:30 a.m. ET: S&P 500, Dow pull back from records while Nasdaq gains

Here's where markets were trading shortly after the opening bell:

  • S&P 500 (^GSPC): -0.9 points (-0.02%) to 4,368.65

  • Dow (^DJI): -66.74 (-0.19%) to 34,803.42

  • Nasdaq (^IXIC): +30.9 (+0.21%) to 14,590.83

  • Crude (CL=F): -$0.97 (-1.3%) to $73.59 a barrel

  • Gold (GC=F): -$7.40 (-0.41%) to $1,803.20 per ounce

  • 10-year Treasury (^TNX): -0.8 bps to yield 1.348%

7:24 a.m. ET Monday: Stock futures point to a mixed open

Here's where markets were trading Monday morning: 

  • S&P 500 futures (ES=F): 4,349.5, -10.5 points (-0.24%)

  • Dow futures (YM=F): 34,604.00, -147.00 points (-0.42%)

  • Nasdaq futures (NQ=F): 14,841.75, +31.25 points (+0.21%)

  • Crude (CL=F): -$1.23 (-1.65%) to $73.33 a barrel

  • Gold (GC=F): -$10.00 (-0.55%) to $1,800.60 per ounce

  • 10-year Treasury (^TNX): -1.2 bps to yield 1.344%

Photo by: zz/STRF/STAR MAX/IPx 2021 3/21/21 Atmosphere in and around Wall Street and The New York Stock Exchange in the Financial District of Lower Manhattan, New York City on March 21, 2021 during the worldwide coronavirus pandemic. Here, The New York Stock Exchange Building. (NYC)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck