The US stock market ended up falling on Wednesday, paring much of the previous session's strong gains, with tech-focused shares leading the way lower.
Alphabet Inc was the biggest drag on the S&P 500 and Nasdaq. Its shares fell by 7.7% after Bard delivered an incorrect answer in an online advertisement.
Federal Reserve officials said on Wednesday that more interest rate increases are in the cards as the US central bank moves ahead with efforts to control inflation, adding to the cautious mood. It was not known that January's jobs report could lead to more aggressive policy actions.
Inflation seems poised to continue this year, but the US central bank's struggle to reach its 2% target may be a long fight with monetary policy kept tighter for longer than anticipated, according to Fed Governor Christopher Waller.
After Fed Chair Jerome Powell's session at the Economic Club of Washington, stocks rallied on Tuesday, where he said interest rates might need to move higher than expected if the US economy remained strong, but said he felt a process of disinflation is underway.
After this kind of run and a move to a valuation certainly in the richer camp, you need to have more evidence to keep the market going higher, said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
The Nasdaq is up about 14% for the year to date.
The Dow Jones Industrial Average fell 207.68 points, or 0.61%, to 33,949. On 01, the S&P 500 lost 46.14 points, or 1.11%, to 4,117. 86 and the Nasdaq Composite dropped 203.27 points, or 1.68%, to 11,910. Communication services fell 4.1% and technology fell 1.3%, and all of the major S&P 500 sectors ended lower on the day. The utilities lost 1.7%.
They have been concerned about mixed reports from US companies this earnings season. Earnings are projected to have declined year-over-year in the fourth quarter of 2022, according to the data from IBES from more than half of the S&P 500 companies.
After the closing bell, Walt Disney's shares were up 1.6% after the company released its quarterly results. The stock ended up 0.1%, as of the end of the regular session.
In his State of the Union address, investors were digesting comments from President Joe Biden, as he supported corporate share buybacks.
CVS Health Corp ended the session up 3.5% after it purchased Oak Street Health Inc.'s $9.5 billion cash buyout. Oak Street Health shares rose 4.6%.
The US exchange volume was 10.62 billion shares, compared to the 11.93 billion average for the full session over the last 20 trading days.
Declining issues outnumbered advance ones on the NYSE by a 2.07 to 1 ratio, on Nasdaq, a 2.21 to 1 ratio favoring decliners.
The S&P 500 posted 11 new 52 week highs and two new lows. The Nasdaq Composite recorded 81 new highs and 35 new lows, and the S&P 500 posted 11 new 52 week highs.