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S&P 500 closes lower Wednesday after two days of strong gains

Pro Picks: Watch all of Wednesday's big stock calls on CNBC
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Pro Picks: Watch all of Wednesday's big stock calls on CNBC

U.S. stocks fell on Wednesday as Wall Street failed to hold on to the sharp gains from the last two sessions.

The Dow Jones Industrial Average lost 42.45 points, or 0.14%, to 30,273.87. Earlier in the day, it was down 429.88 points. The S&P 500 lost 0.20% to close at 3,783.28, and the Nasdaq Composite slid 0.25% to 11,148.64.

"It's a moment of pause for the market to reflect on how durable the rally the past two days actually could turn out to be," said Yung-Yu Ma, chief investment strategist for BMO Wealth Management. "The market's making the assessment that it's really going to take a lot for the Fed to make a dovish pivot. Yes, the JOLTS number was extremely welcome, no question about that. But that is really the tip of the iceberg in terms of what the Fed needs to actually take a softer tone."

"There's some reality creeping into the market and that enthusiasm of a good number is starting to fade," he added.

Stocks staged a major rally earlier in the week, with the S&P 500 posting its biggest two-day gain since 2020, as bond yields declined from multiyear highs. On Wednesday, yields rose sharply, with the rate on the benchmark 10-year Treasury surpassing 3.7% after briefly dipping below 3.6% in the previous session. That put pressure on stocks for much of the day.

Private payrolls increased by 208,000, ADP said in its latest report, topping a Dow Jones estimate. Traders are looking ahead to Friday's release of the nonfarm payrolls report. September's ISM services index also came out Wednesday showing solid growth.

Some market participants wondered whether markets have finally priced in a bottom after the sharp declines in the prior quarter.

"Q3 earnings reporting is not too far away and it's definitely in the market psychology that the Q2 earnings season helped to stabilize the markets," Ma said. "There was a lot of pessimism in the market that it was able to rally pretty strongly from for a couple of months. Right now there's also this hope that the earnings season can stabilize the market and maybe come to the rescue again, the way that it did last quarter."

Lea la cobertura del mercado de hoy en español aquí.

Stocks slip in final minutes of trading to close at a loss

The major averages made a late-day comeback from the lows to briefly trade in positive territory, but all three ended the session down.

The S&P 500 closed the day down 0.2% to close at 3,783.28. The Nasdaq Composite shed 0.25% to end at 11,148.64. The Dow Jones Industrial Average, which came back from a loss of more than 400 points, closed lower by 0.14% at 30,273.87.

-Darla Mercado

Fed's Bostic says these are just the 'early days' of the inflation fight

Atlanta Federal Reserve President Raphael Bostic talked tough on inflation in a speech Wednesday, saying the central bank still has a lot of work to do before it can declare victory.

"We must remain vigilant because this inflation battle is likely still in early days if the projections of my [Federal Open Market Committee] colleagues are correct," Bostic said in a speech to Northwestern University's Institute for Policy Research.

Bostic added that it likely "will take some time" to get inflation back to the Fed's 2% target as "we are still decidedly in the inflationary woods, not out of them."

From a rates perspective, Bostic said he envisions the Fed's benchmark levy rising to a 4%-4.5% before policymakers can take a step back to evaluate progress. The fed funds rate currently sits in a range of 3%-3.25%; projections the FOMC released in September foresee rates rising to 4.6% in 2023, putting Bostic slightly to the dovish side of the committee.

However, he added that he would say to anyone expecting the Fed to cut rates next year, "Not so fast."

Bostic is not a voting member of the FOMC either this year or next, though he does get to voice his policy stance during meetings.

—Jeff Cox

Stocks stage a late-day rally

U.S. stocks staged a big reversal in the final hour of trading Wednesday after being in the red for most of the day. The Dow Jones Industrial Average jumped 105 points, or 0.3%. Earlier in the day, the Dow was down as much as 429.88 points. The S&P 500 rose 0.3% and the Nasdaq Composite advanced 0.2%.

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— Tanaya Macheel

CNBC Pro Talks: Katie Stockton on finding "pockets of strength" in a losing market

As investors deliberate where stocks will go after this week's two-day rally, Fairlead Strategies' founder Katie Stockton told CNBC Pro how investors can position their portfolios for a volatile market.

The chart analyst said she expects that markets will remain in a downtrend, pointing to poor technical indicators. She advised investors to remain underexposed to stocks.

Still, there are some "pockets of strength" that investors can look to.

Watch the full CNBC Pro Talks interview here.

— Sarah Min

Stocks driving the afternoon comeback

Major averages jumped off the lows in afternoon trading Wednesday, led by energy names Exxon Mobil and Halliburton, which both rallied more than 4%. Semiconductors, the industry that came under pressure earlier, traded off their lows. Qualcomm rose 1.5%, driving the comeback in the sector. Meanwhile, Nike jumped 2% in afternoon trading, leading consumer stocks higher

— Yun Li

Dow turns positive as Wall Street tries to keep this week's rally going

The Dow Jones Industrial Average briefly turned positive Wednesday afternoon as Wall Street fought to get the index back in the green, following its two-day 1,500-point gain earlier this week.

The blue chip index added 15 points, or 0.1%, after being down as much as 429.88 points earlier in the day, or more than 1%. The S&P 500 and Nasdaq Composite were also well off their intraday lows, last down 0.2% and 0.4%, respectively.

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— Tanaya Macheel

Art Cashin doesn't trust the market's two-day rally

Art Cashin, UBS director of floor operations, is wary of this week's two-day monster rally in stocks.

"The rally was very impressive, unfortunately I was not happy with the spark that started it, that event-risk routine," he said on CNBC's "Squawk on the Street" on Wednesday.

That spark was the move by the Bank of England to scrap the selling of gilts (U.K. government bonds) and begin temporarily buying long-dated bonds to calm a potential market meltdown that was caused by the new government's budget. Later, the government had to reverse its plans to drop its top income tax rate.

Furthermore, the United Nations Conference on Trade and Development recently warned central banks that continued interest rate hikes could hurt the global economy.

Read more on CNBC Pro.

—Carmen Reinicke

NYSE decliners lead advancers 3-1

As of 1:09 p.m. ET, 2,250 New York Stock Exchange-listed stocks traded lower, while just 738 advanced, as a sharp market rally cooled off. Put another way, roughly three stocks declined for every one advancer.

— Fred Imbert

Stocks making the biggest moves midday: Carnival, Enphase and more

These companies are making headlines midday:

  • Carnival — Cruise line stocks declined as a group. Shares of Carnival fell 7%, Royal Caribbean Group dropped 3.5%, and Norwegian Cruise Line Holdings declined 3.4%. The group got a boost a day earlier, after Norwegian said it would end all Covid-19 testing and vaccination requirements.
  • Enphase EnergySunrun — Solar stocks declined Wednesday after their rally earlier this week. Shares of Enphase Energy declined 13%, and Sunrun tumbled 9.5%.
  • Lamb Weston Holdings — Shares of the food products company climbed 4.7% after Lamb Weston reported large increases in net sales and net income for its fiscal first quarter. The Idaho-based company also maintained its full-year outlook despite seeing a volume decline in the quarter.

Check out more midday movers here.

— Tanaya Macheel

Oil stocks rise after OPEC+ decision

The decision by OPEC+ to cut production has boosted oil prices and energy stocks.

The group of oil-producing nations announced on Wednesday that it would reduce daily production by 2 million barrels, ignoring pressure from the U.S. to keep pumping.

As a result, energy is the only sector moving higher in the S&P 500 on Wednesday. Shares of Schlumberger are up more than 6%, while Exxon Mobil and Halliburton have gained 3.8% and 2.9%, respectively.

Futures for U.S. benchmark West Texas intermediate crude were last at $88.25 per barrel, up 2% for the day.

— Jesse Pound

Lumen shares drop as Wells Fargo downgrades stock

Lumen is down more than 10% after Wells Fargo downgraded the tech company's rating to equal weight from overweight.

Analyst Eric Luebchow said its mass market segment, referred to as RemainCo, was struggling and warned downsides could put dividends at risk. He cut earnings before debt, interest, taxes and amortization forecasts for RemainCo to $5.9 billion, about $600 million below Wall Street estimates.

He cut the stock's price target to $8, which is about 0.5% below where the stock closed Tuesday but more than 56% less than its previous target of $12.50.

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Lumen shares are down about 42.3% this year. The stock hit a 52-week low during day trading Wednesday.

— Alex Harring

Higher rates expose market fragilities, TS Lombard says

The recent jump in yields and higher rates from central banks around the world are making fragile spots in the market more apparent, TS Lombard said.

"After a decade of perma low rates and QE, stress is building up, exposing market fragilities that can feed into the real economy," wrote the firm's Skylar Montgomery Koning. "The risk of an accident is increasing, and it will likely be from a vulnerability we are unaware of (because we can protect only against the known risks)."

In all, this has led to investors pulling money away from fixed income and equities in favor of cash, Koning said.

U.S. stocks were under pressure once again Wednesday, with the Dow losing roughly 400 points.

—Fred Imbert

Solar stocks under pressure

Clean energy stocks are some of the worst performers on Wednesday morning, as investors shed risk after the sharp rally to start the week.

The iShares Global Clean Energy ETF (ICLN) and Invesco Solar ETF (TAN) are both down more than 5% for the day. The Clean Energy ETF is on track for its worst day since June 13.

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The ETFs are being weighed down by shares of Sunrun and Enphase Energy in particular, which are each down more than 9%.

— Jesse Pound, Gina Francolla

Services measure shows economy is holding up

The services sector grew at a solid pace last month, as gains in employment and orders and a decline in prices pointing to a resilient U.S. economy.

September's ISM services index registered a 56.7% reading, indicating the level of companies reporting expansion for the month. Employment rose 2.8 points to 53% while the prices index fell 2.8 points to 68.7%, still a robust reading but continuing to move lower.

Economists surveyed by Dow Jones had been looking for a reading of 56%, so the report was slightly better than expectations and just below the August reading of 56.9%.

Services account for about 45% of U.S. gross domestic product.

Jeff Cox

Stocks open lower, Dow drops 300 points

U.S. stocks opened lower on Wednesday, following a big two-day gain for all of the major averages.

The Dow Jones Industrial Average dropped about 300 points to start the day, while the S&P 500 and Nasdaq Composite dipped 1.1% and 1.3%, respectively.

A rebound in in Treasury yields, with the 10-year rate up 10 basis points higher at 3.713% added pressure to stocks.

— Tanaya Macheel

Trade deficit fell more than expected in August

The U.S. trade deficit fell slightly more than expected in August to its lowest level in more than a year, the Bureau of Economic Analysis reported Wednesday.

The trade shortfall declined to $67.4 billion, a $3.1 billion drop from the previous month that was a bit better than the Dow Jones estimate of $67.7 billion. That marked the lowest level since May 2021. In March 2022, the deficit had hit a record $106.9 billion.

A drop in the goods deficit of $3.4 billion helped account for most of the decline as the economy shifts back to higher demand for services.

—Jeff Cox

U.S. labor market showed strength in September, ADP jobs report shows

Businesses added 208,000 jobs for the month of September, payroll services firm ADP reported Wednesday. That number is better than the 200,000 Dow Jones estimate and ahead of the upwardly revised 185,000 in August, according to ADP.

Trade, transportation and utilities saw a jobs gain of 147,000, while professional and business services and education and health services also posted large increases.

ADP's report comes two days before the closely watched nonfarm payrolls report issued by the Bureau of Labor Statistics. Federal Reserve officials are watching the jobs numbers closely as the central bank looks to stem high inflation.

— Jeff Cox

Stocks making the biggest moves premarket

These companies are making headlines before the bell:

  • Morgan StanleyGoldman Sachs – Shares of the two banks slid 1.4% and 1.6%, respectively, after Atlantic Equities downgraded both stocks due to the potential of declining investment banking volume.
  • General Motors – The auto maker's shares dipped 1.8% after Morgan Stanley lowered its price target on the stock.
  • Bionano Genomics – Shares jumped 11.3% after the company published a study on using optical genome mapping to investigate liver cancer.

Check out more premarket movers here.

— Alex Harring

Two-day huge move in market offers hope for stronger gains ahead

The back-to-back huge market moves Monday and Tuesday provide some hope that better days are ahead for the stock market.

While single-day bursts often are signs of a bear market bounce, two-day rallies of more than 2% historically have signaled stronger gains in the future.

There have been 31 such instances for the S&P 500 since 1953, and the index has averaged a 0.61% gain one week later following those moves, according to Bespoke Investment Group. While gains tend to muddle along shortly after, the 12-month return typically has been 14.6% and the S&P 500 has been higher 80% of the time.

Having rallies off that size is highly unusual to start the month — Bespoke reports that there was only one other time, in August 1984, when a month began with consecutive gains of 2%.

—Jeff Cox

Ford shares move higher on Morgan Stanley upgrade

Shares of Ford moved more than 1% higher in premarket trading after Morgan Stanley upgraded them on Wednesday .

The auto maker's stock has been under pressure recently, They lost 18.5% over the past month, after the company warned in late September of an extra $1 billion in supply chain costs for the third quarter. Now, Morgan Stanley says that provides an attractive entry point for investors.

Read more about this call on CNBC Pro.

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— Tanaya Macheel

European markets retreat as rally fades

European stocks retreated on Wednesday as the positive trend seen in global stocks in recent days faded.

The pan-European Stoxx 600 was down 1% in early trade. Autos dropped 2.9% to lead losses as all sectors and major bourses slid into negative territory following the latest PMI reading out of the euro zone, which cemented fears of a recession in the 19-member bloc.

- Elliot Smith

CNBC Pro: This isn't the market bottom, Morgan Stanley says, naming 3 things that have to happen first

There's unlikely to be a sustainable market bottom unless three conditions are met, according to Morgan Stanley.

"We … remind readers that the last few innings of every bear market are very challenging to trade as volatility becomes extreme," they wrote. "None of the conditions we have been looking for to call an end to this bear market are in place."

Pro subscribers can read more here.

— Weizhen Tan

Stifel's Barry Bannister says there is "room for a rally" after two straight days of gains

Stifel chief equity strategist Barry Bannister said stocks can advance further after this week's sharp two-day rally.

"I don't think you have to worry about a recession until the second half of '23," Stifel chief equity strategist Barry Bannister said Tuesday on CNBC's "Closing Bell: Overtime." "So there is room for a rally as you go into the early part of next year."

The strategist said there could be a "conditional pause" at the December meeting as the Federal Reserve reviews the impact of its interest rate hiking plan on inflation.

"Inflation leading indicators are all falling, global liquidity has tightened quite a bit. They don't want to kill the patient to cure the disease," Bannister said. "And if the data kept going their way, then the pause would last, and if the data don't go their way, they would hike again and we would go right back down."

— Sarah Min

September private payrolls expected to grow by 200,000 in ADP report

September's ADP private payrolls report is due out Wednesday at 8:15 a.m. ET.

Economists are expecting private payrolls to have grown by 200,000 last month, according to estimates from Dow Jones.

If the report meets those estimates, it would mean an acceleration from the pace of hiring in August, when private payrolls rose by just 132,000 for the month.

— Sarah Min

Stock futures open lower

U.S. stock futures fell slightly on Tuesday night after the S&P 500 posted its best two-day gain in roughly two years.

Dow Jones Industrial Average futures fell by 45 points, or 0.19%. S&P 500 and Nasdaq 100 futures dipped 0.15% and 0.13%, respectively.

— Sarah Min