Stocks closed broadly lower on Wall Street Wednesday and deepened the weekly losses for major indexes following another choppy day of trading.
The major indexes bounced between gains and losses throughout the day, with technology stocks again giving direction to the broader market. The sector has triggered much of the choppiness in the market as investors shift money in expectation of rising interest rates. Higher rates make shares in high-flying tech companies and other expensive growth stocks relatively less attractive.
"We've seen some givebacks from the returns we got last year," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. "What we're seeing is that the market is resetting now."
The S&P 500 fell 44.35 points, or 1%, to 4,532.76, with 77% of stocks in the benchmark index losing ground. The only sectors that closed with gains were utilities and household goods makers, signaling a shift to less risky investments for traders.
The Dow Jones Industrial Average fell 339.82, or 0.96%, to 35,028.65.
The tech-heavy Nasdaq fell 166.64, or 1.15%, to 14,340.25. The index is now more than 10% below the all-time high it set on Nov. 19, a fall which is commonly considered a correction.
Technology giant Apple shed 2.1% and chip maker Nvidia fell 3.2%.
Every major index set new lows for the year for the second day in a row.
Small company stocks, a gauge of confidence in economic growth, fell more than the rest of the market. The Russell 2000 index fell 33.44 points, or 1.6%, to 2,062.78.
Gold prices, which often rise when investors are nervous about risks in the broader market, gained 1.6%.
Bond yields fell. The yield on the 10-year Treasury fell to 1.85% from 1.87% late Tuesday.
Stocks have slid in January as investors gauge how rising inflation will impact businesses and consumers, along with the Federal Reserve's next move on interest rate policy.
Investors are busy reviewing the latest round of corporate earnings. Health insurer UnitedHealth Group rose 0.3% after reporting encouraging financial results. Bank of America rose 0.4% after reporting a jump in profits that beat analysts' forecasts.
Household and consumer goods company Procter & Gamble rose 3.4% after also reporting strong financial results. The maker of Dawn dish detergent and other products reported strong results as it passed along higher costs to consumers.
Outside of earnings, Ford slumped 7.9% following news that it's recalling about 200,000 cars in the U.S. to fix a problem that can stop the brake lights from shutting off.
Wall Street is closely watching the latest round of results to gauge whether inflation is cutting into profit margins for companies and to see whether consumers are accepting the higher prices without cutting back on spending. Demand for goods has outpaced companies' capacity to make and supply products, which has caused supply chain problems and raised raw materials costs.
Economists expect inflation to remain high until those supply chain issues are solved and consumer demand is tempered. Meanwhile, the Federal Reserve is speeding up its withdrawal of support for markets and the economy. The central bank is likely to raise interest rates earlier and more often than had been expected to fight rising inflation.
As of late Tuesday, investors were pricing in a better than 86% probability that the Fed will raise short-term rates at its meeting of policymakers in March. A month ago, they saw less than a 47% chance of that, according to CME Group.
More big company earnings are on tap for Wall Street today. American Airlines, Union Pacific, CSX and Netflix will all report their latest financial results.