Financials, down 0.8%, were the biggest drag on the S&P 500. An S&P downgrade of multiple regional U.S. lenders weighed on bank shares, with the KBW regional banking index down 2.4% and the S&P 500 banks index down 2.1%.
Investors will seek some clarity on the rate outlook when Fed Chair Jerome Powell speaks at a meeting in Jackson Hole on Friday,
“Rates have backed up pretty good again, so that’s kind of putting somewhat of a damper on stocks,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
The benchmark 10-year Treasury yield hit almost 16-year peaks on the view the Fed could keep interest rates higher for longer.
The Dow Jones Industrial Average fell 170.34 points, or 0.49%, to 34,293.35, the S&P 500 lost 11.06 points, or 0.25%, to 4,388.71 and the Nasdaq Composite added 13.79 points, or 0.1%, to 13,511.38.
Investors also eagerly awaited results and a forecast from chip company Nvidia due late on Wednesday. Its blockbuster report last quarter fueled a rally in tech stocks and artificial intelligence hopes. Shares of Nvidia hit an all-time high of $481.87 early but were last down 2.8%.
Among decliners, Macy’s fell 14% after the department store chain warned of weak consumer spending through the crucial holiday shopping season.
Declining issues outnumbered advancing ones on the NYSE by a 1.34-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favored decliners.
The S&P 500 posted 4 new 52-week highs and 12 new lows; the Nasdaq Composite recorded 37 new highs and 196 new lows.