NEW YORK — U.S. stocks were down in afternoon trading on Wednesday, paring some of the strong gains in the previous session, with tech-focused shares leading the way lower.
Alphabet shares were down about 8% after its new AI chatbot Bard delivered an incorrect answer in an online advertisement.
Among the day’s Federal Reserve speakers, Fed Governor Christopher Waller said inflation seems poised to continue slowing this year but the U.S. central bank’s battle to reach its 2% target “might be a long fight” with monetary policy kept tighter for longer than anticipated.
Stocks rallied on Tuesday following Fed Chair Jerome Powell’s session before the Economic Club of Washington, where he said interest rates might need to move higher than expected if the U.S. economy remained strong, but said he felt a process of “disinflation” is under way.
Investors have been concerned about how aggressive the Fed’s actions may be this year following Friday’s surprisingly strong U.S. jobs report.
They have also been concerned about mixed reports from U.S. companies this earnings season. With results in from more than half of the S&P 500 companies, earnings still are expected to have declined year-over-year in the fourth quarter of 2022, according to IBES data from Refinitiv.
“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 climbing higher,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
The Dow Jones Industrial Average fell 157.71 points, or 0.46%, to 33,998.98, the S&P 500 lost 41.4 points, or 0.99%, to 4,122.6 and the Nasdaq Composite dropped 182.63 points, or 1.51%, to 11,931.16.
Shares of entertainment company Walt Disney were nearly flat ahead of its quarterly results due after the closing bell. Microsoft Corp shares were up 0.5% after it said it was revamping its Bing search engine and Edge Web browser with artificial intelligence.
Investors also were digesting comments from President Joe Biden late Tuesday at the State of the Union address, supporting calls to tax corporate share buybacks.
CVS Health Corp were up 4.6% after its $9.5 billion cash buyout offer for Oak Street Health Inc. Oak Street Health rose 4.9%.
Declining issues outnumbered advancing ones on the NYSE by a 2.11-to-1 ratio; on Nasdaq, a 2.25-to-1 ratio favored decliners.
The S&P 500 posted 11 new 52-week highs and two new lows; the Nasdaq Composite recorded 69 new highs and 30 new lows. (Additional reporting by Johann M Cherian, Shubham Batra and Shreyashi Sanyal in Bengaluru; Editing by Marguerita Choy)