The Australian sharemarket has shed early gains to flatten out by midday, following a mixed session on Wall Street, with the buoyant energy and materials sectors held back by falls in tech, consumer staples and consumer discretionary stocks.

The ASX 200 was up a negligible 0.7 points to 6,790.6 in afternoon trading. The technology sector was down 1.5 per cent. Major tech companies Alphabet (Google), Meta and Microsoft are due to report earnings updates later this week.

Most other sectors including financials were largely flat.

Wall Street jumped late to close off a mixed session, as investors braced for a two-day meeting of the Federal Reserve this week where it’s expected the central bank will raise interest rates sharply to combat inflation.

The S&P 500 index finished 0.1 per cent higher after fluctuating between gains and losses, the Dow Jones added 0.3 per cent while the technology-heavy Nasdaq Composite slipped by 0.4 per cent.

The major indexes are coming off solid gains last week following a mix of mostly better-than-expected reports on corporate profits. Falling yields in the bond market also helped, easing the pressure on stocks after expectations for rate hikes by the Fed sent yields soaring much of this year.

On Wednesday, most economists expect the Fed to announce a three-quarter percentage point hike in its short-term rate, a second consecutive hefty increase that it hasn’t otherwise implemented since 1994. It would put the Fed’s benchmark rate in a range of 2.25 per cent to 2.5 per cent, the highest since 2018.

The US economy is slowing, but healthy hiring shows it isn’t yet in recession, Treasury Secretary Janet Yellen said Sunday on NBC’s Meet the Press. She spoke ahead of the release this week of a slew of economic reports that will shed light on an economy currently besieged by rampant inflation as interest rates rise.

Some early signs suggest that inflation may be cooling down from red-hot levels. Auto club AAA said on its website as of Monday that the average price of a gallon of regular petrol is $US4.36 per gallon. That’s down 16 cents from a week ago, and 55 cents cheaper than late June, when the average price was $US4.91 per gallon. Crude oil prices have fallen nearly 10 per cent this month alone.