Wall Street retreats after intraday records
U.S. stock markets closed mixed on Wednesday, with the S&P 500 and the Dow Jones Industrial Average ending lower after hitting intraday record highs earlier in the session. Declines in major financial stocks weighed on broader indices, while renewed buying in artificial intelligence-related shares supported the Nasdaq.
Financials and defense stocks under pressure
Shares of JPMorgan Chase fell 2.3% after Wolfe Research downgraded the bank to peer perform from outperform. Blackstone and Apollo Global Management each dropped more than 5%, contributing to a 1.4% decline in the S&P 500 financials index.
Housing-related stocks also came under pressure after President Donald Trump said he planned to ban certain entities from buying single-family homes to curb housing prices. American Homes 4 Rent fell 4.3%, while Zillow gained more than 2%.
Defense contractors declined sharply after Trump said he would not allow dividends or share buybacks until production issues are resolved. Northrop Grumman fell 5.5% and Lockheed Martin dropped 4.8%.
AI stocks regain momentum
Technology shares tied to artificial intelligence rebounded after recent concerns about overvaluation. Nvidia and Microsoft rose about 1% each, while Alphabet gained more than 2%.
Investor appetite for AI leaders was highlighted by plans from Anthropic to raise multibillion-dollar funding at a valuation of $350 billion, which would place the private company above most publicly traded firms by market value.
Market valuations and economic data
With fourth-quarter earnings season approaching, Wall Street valuations remain elevated. The S&P 500 is trading at roughly 22 times expected earnings, above its five-year average of 19.
Economic data showed U.S. job openings fell more than expected in November, while private payroll growth in December came in below forecasts. The figures did little to alter expectations for interest rate cuts ahead of Friday’s key employment report.
Geopolitics and sector moves
Investors also monitored geopolitical developments after the U.S. said it had seized a Russian-flagged tanker linked to Venezuela and discussed options related to Greenland.
Memory and storage technology stocks retreated after recent rallies, with Western Digital down nearly 9% and Seagate Technology falling 6.7%. First Solar slid 10% after a downgrade by Jefferies.
Index performance and trading activity
The S&P 500 fell 0.34% to 6,920.93 points. The Nasdaq gained 0.16% to 23,584.28 points, while the Dow Jones declined 0.94% to 48,996.08 points.
Declining stocks outnumbered advancing ones by a wide margin on the S&P 500, and trading volume was heavier than average, reflecting heightened investor activity.
