* Tech sector snaps rally, Energy stocks gain on oil jump
* McDonald’s at 4-month high after layoffs report
* Dow up 0.37 pct, S&P off 0.09 pct, Nasdaq down 0.74 pct (Updates to late afternoon, adds commentary, changes byline, adds New York dateline)
By Sinéad Carew
NEW YORK, June 7 (Reuters) - The S&P and Nasdaq fell on Thursday with the technology sector snapping its recent rally while investors kept an eye on trade tensions and waited for U.S. and European central bank meetings.
U.S. Treasury yields fell on Thursday, reversing the prior day’s move as safe-haven demand rose on worries about trade disputes between the United States and its major trade partners ahead of the Group of Seven (G7) summit.
Investors worried about a showdown at the meeting, set for Friday and Saturday in Charlevoix, Quebec as U.S. President Donald Trump was expected to stick to his tough stance on trade after imposing tariffs on steel and aluminum imports from Canada, Mexico and the European Union last week.
“There’s caution associated with the G7 meeting which historically is neutral for the market. This G7 meeting doesn’t fit the template particularly with regard to trade,” said Quincy Krosby, chief market strategist at Prudential Financial.
Canada and Mexico have retaliated against a range of U.S. exports and the EU has promised to do so as well.
“Equally there’s a European Central Bank meeting and a Federal Reserve meeting next week. Both are paramount for the market’s direction,” said Krosby.
The Fed is widely expected to announce an interest rate hike on Wednesday but investors will be watching for clues on whether the U.S. central bank could raise rates a fourth time this year.
At 2:48 p.m. (1848 GMT), the Dow Jones Industrial Average was up 92.47 points, or 0.37 percent, to 25,238.86, the S&P 500 had lost 2.54 points, or 0.09 percent, to 2,769.81 and the Nasdaq Composite had dropped 56.69 points, or 0.74 percent, to 7,632.56.
“The market is just a little exhausted. I think it is digesting the most recent actions,” said Ken Polcari, Director of the NYSE floor division at O’Neil Securities in New York.
“It can’t keep going up every day without a pullback. Logic tells you that it’s got to rest.”
The S&P technology index fell 1.2 percent, led by heavyweights Microsoft and Facebook, which both fell more than 1.6 percent. The losses followed a six-day rally that had pushed the index to record levels.
The Dow was boosted on Thursday by a 4.3 percent jump in McDonald’s shares after a report that the company was planning a new round of layoffs.
The S&P 500’s Energy index was the biggest gainer out of the benchmark’s 11 major sectors, helped by rising oil prices.
Brent crude was up 2.6 percent on concerns of a plunge in exports from Venezuela and worries OPEC may not raise production at its meeting this month, helping the S&P energy index rise more than 1.6 percent.
There were a few bright spots in the tech sector, with some chipmakers and optical stocks gaining after U.S. Commerce Secretary Wilbur Ross said Washington had reached a deal with China’s ZTE that would allow it to do business again with U.S. suppliers.
Advancing issues outnumbered declining ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favored decliners.
The S&P 500 posted 52 new 52-week highs and seven new lows; the Nasdaq Composite recorded 214 new highs and 33 new lows. (Additional reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and James Dalgleish)