S&P 500 falls more than 1% to close below 4,200 for first time since May, Nasdaq notches worst day since February

Stocks closed lower on Wednesday, with the S&P 500 notching its lowest level since May while the Nasdaq Composite slid to its worst day of since February.

The benchmark S&P 500 ticked down 1.4% to close at 4,186.77, while the Nasdaq slipped 2.4% to 12,821.22. The Dow Jones Industrial Average fell 105.45 points, or 0.3%, to finish the session at 33,053.93.

— Brian Evans

Pershing Square's Bill Ackman pocketed about $200 million from his latest Treasury trade, the Financial Times reported Wednesday, citing people familiar with the bet.

The hedge fund manager revealed Monday he covered his bet against 30-year Treasurys, believing that investors may increasingly buy bonds as a safe haven because of growing geopolitical risks.

"There is too much risk in the world to remain short bonds at current long-term rates," Ackman said in a post on X, formerly known as Twitter, on Monday morning. "We covered our bond short."

The firm's flagship fund has rallied 11.6% this year through Oct. 17.

— Yun Li

Charles Schwab CEO Walt Bettinger reassured financial advisors on Wednesday that the brokerage firm was not at high risk during the regional banking crisis this spring.

The rapid rise in interest rates earlier this year put pressure on financial institutions, especially those that held long-dated assets. Bettinger said that, while Schwab did suffer on-paper losses, the firm's duration was less than three years at the time of the banking turmoil and that there was no realistic risk of the losses causing a crisis at the company.

"The idea that we would have to liquidate everything was absurd. And it has proven to be absurd," Bettinger said at Schwab's Impact conference.

Bettinger did acknowledge that higher rates have hurt the company's earnings and stock price. Schwab's stock is down more than 40% year to date.

"I have no concerns whatsoever about our stability going forward. In time, the securities with losses will mature, they'll run off. Our revenue will grow even faster, and this will become an issue of history," Bettinger said.

— Jesse Pound

Popular technology stocks lagged on Wednesday, dragging down the S&P 500 and Nasdaq Composite by 1.4% and 2.3%, respectively.

Alphabet shares sank 10% and were on pace for their worst day since March 2020 after reporting cloud revenue that fell short of expectations. Dominant AI chipmaker Nvidia shed 4%, while Amazon dropped 5.5%.

Another contributor to Wednesday's declines was Meta Platforms. The Facebook parent company slated to report earning after the bell slumped 4%. Salesforce and Advanced Micro Devices also lagged, falling 3.7% and 5.5%, respectively. Intel fell 5.3%.

Microsoft managed to buck the broader downtrend, gaining nearly 3% on stronger-than-expected results. Apple and Tesla were on pace for smaller losses, dipped 1.7% and 1%, respectively.

— Samantha Subin

The Nasdaq Composite dropped more than 2.3% during Wednesday's session, putting the tech-heavy index within close range of its 200-day moving average at 12,766.693 and on pace for its worst day since February.

The last time it closed below that threshold was March 13.

The 200-day is a closely watched momentum signal by Wall Street that can indicate long-term trends for an asset or index. A close below that level may suggest a downtrend.

— Samantha Subin, Gina Francolla

Around one out of every 10 stocks in the S&P 500 are trading at lows not seen in at least a year during Wednesday's session.

Many on the list of 60 stocks hit share prices last seen in 2020, but the lows of a handful go back all the way to early 2014. The list of names hitting lows not seen in at least a year ranges from financial giants like Goldman Sachs to technology names including PayPal to consumer-focused companies such as Estee Lauder.

The moves come during a difficult day for the S&P 500 as a whole, with the broad index down about 1.4%.

— Alex Harring, Gina Francolla

Communications services is the worst-performing sector in the S&P 500 Wednesday, last down more than 6%.

Alphabet led the sector to the downside, dropping more than 9% during afternoon trading as investors parsed through disappointing results related to its cloud business. Match Group dropped 3.6%, while Meta Platforms slumped 3.2%. The Facebook parent is slated to report earnings after the bell.

AT&T, Charter Communications and Walt Disney fell more than 2% each.

— Samantha Subin

Wednesday's sell-off pushed the S&P 500 below 4,200 — a closely watched technical level on Wall Street. It would be the index's first close below that mark since May 31, when it finished at 4,179.83.

— Fred Imbert

Check out the companies making headlines in midday trading.

• Microsoft — Shares jumped 2.5% as investors cheered the Xbox maker's fiscal first-quarter results released Tuesday. Microsoft posted almost 13% year-over-year revenue growth, and its Azure cloud segment saw revenue gain 29% for the quarter. The Windows software maker also posted a rise in profit due to slower operating expense growth.
• Alphabet — Shares of the Google parent dropped more than 8%, putting it on pace for the worst day in nearly a year, after the dominant search engine owner reported cloud revenue that missed analyst expectations.
• Norfolk Southern — The freight railroad dropped 5% on the back of disappointing third-quarter earnings. Norfolk Southern earned $2.65 per share, excluding items, while analysts polled by LSEG estimated a profit of $2.69 per share. Revenue was about in line with expectations.

Read the full list here.

— Sarah Min

Shares of Boyd Gaming lost more than 11% on Wednesday, putting them on track for their biggest one-day sell-off since March 2020. The sell-off was sparked by lackluster third-quarter results.

EBITDAR — a key profit measure for casinos — was down by nearly 10% in the key midwest and south regions. The company was also under pressure from elevated labor, utilities and insurance costs.

— Fred Imbert

The Federal Reserve has tightened further than investors expect, according to Torsten Slok, chief economist at Apollo Global Management.

In fact, the economist expects the federal funds rate is actually 7%, not 5.5%, when accounting for the reduction in its balance sheet. The fed funds rate is set by the central bank and is the interest rate banks can charge for overnight loans.

"We never really had the balance sheet of forward guidance playing the major significant role that it does today," Slok said Wednesday on CNBC's "Squawk on the Street." "And when you quantify the impact, in particular, of running down the balance sheet as they're doing at the moment, they do find in their own calculations that the Fed funds rate today is not only 5.5%, but it's actually 7%."

"In other words, policy is a lot tighter than what they and we all think, simply because the other tools that they have are also helping in putting downward pressure on the economy," he said.

— Sarah Min

Thermo Fisher Scientific plunged 8% in morning trading after the company cut its full-year earnings guidance. The company now sees adjusted earnings per share of $21.50 for 2023, well below pervious guidance calling for earnings between $22.28 and $22.72 per share.

The company's full-year guidance for 2024 also weighed on the stock. The company sees adjusted earnings of around $21.75 per share, below a FactSet estimate of $23.91 per share.

Shares fell to their lowest level since June 2021.

— Lisa Kailai Han

Intel, Dow and Boeing all declined more than 2% Wednesday, pulling the Dow Jones Industrial Average down by 64 points, or 0.2%. Dow and Boeing fell on the back of their third-quarter earnings announcements, while Intel is scheduled to report earnings on Thursday.

Meanwhile, Microsoft was the index's top gainer, adding 3% after its successful fiscal first quarter results.

— Hakyung Kim

In another sign of economic resiliency, new home sales in the U.S. rose much more than expected. Sales in September came in at 759,000, well above the August number of 675,000. That figure also exceeded a Dow Jones estimate of 680,000.

The data comes as investors fret over the possibility of higher Federal Reserve rates for longer than anticipated.

— Fred Imbert

Alphabet shares sank more than 8%, in its biggest drop in roughly a year, a day after reporting third-quarter Google Cloud revenue that fell short of Wall Street's expectations.

The disappointment from Alphabet coincided with earnings from Microsoft that showed accelerating Azure growth.

Despite beating expectations on the top and bottom lines, the search giant's Google Cloud revenue came in at $8.41 billion, falling short of the $8.64 billion expected by analysts polled by StreetAccount.

— Samantha Subin

Boeing shares failed to maintain their early momentum and were down more than 1% as traders digested the company's third-quarter results. The company reported a bigger-than-expected quarterly loss and cut its 737 Max delivery forecast due to production issues.

Shares were up as much as 2.5% earlier in the session.

— Fred Imbert

The S&P 500 communications services sector pulled back nearly 5% on Tuesday, and was on track for its worst day since Oct. 26, 2022.

Google-parent company Alphabet is the largest component of the segment, and shares are down nearly 9% so far on Wednesday.

— Brian Evans

Tech stocks led the Nasdaq Composite lower on Wednesday as Google-parent Alphabet stock dragged down the broader sector.

The tech-heavy Nasdaq fell 0.9%, while the S&P 500 slipped 0.5%. The Dow Jones Industrial Average climbed 76 points, or 0.2%.

— Brian Evans

Tech stocks led the Nasdaq Composite lower on Wednesday as Google-parent Alphabet stock dragged down the broader sector.

The tech-heavy Nasdaq fell 0.9%, while the S&P 500 slipped 0.5%. The Dow Jones Industrial Average climbed 76 points, or 0.2%.

— Brian Evans

Alphabet shares were down more than 6% Wednesday morning. This marked the fourth time markets reacted negatively to the company's earnings results out of its last five reports, or since the start of October 2022, according to Bespoke Investment Group.

Nonetheless, the stock has rallied over 35% during this timeframe.

— Hakyung Kim

Check out some of the companies making headlines before the bell.

Alphabet — The Google and YouTube parent sank more than 6% premarket after results for its cloud business fell short of estimates. Alphabet surpassed expectations on the top and bottom lines but posted cloud revenue totaling $8.41 billion versus the $8.64 billion expected by analysts polled by LSEG.

Microsoft — Microsoft shares jumped nearly 4% before the bell after the Xbox owner posted stronger-than-expected fiscal first-quarter results and showed an uptick in profit due to easing operating expenses. Revenue for the company's Azure cloud unit also exceeded expectations, jumping 29% during the period.

Boeing — Shares of the jet plane maker rose more than 3% premarket after it reported a quarterly revenue beat. Boeing raised its 787 Dreamliner production target to five per month from four, but trimmed its 2023 guidance for 737 Max deliveries, which was expected. Boeing posted a wider-than-expected losses for the quarter.

Read the full list here.

— Brian Evans

Shares of aviation behemoth Boeing climbed 3.7% after third-quarter results showed revenue for commercial airplanes exceeded expectations. The company also reiterated its free cash flow outlook for the year.

The company did post a bigger-than-expected adjusted loss for the quarter, however.

Boeing reported a loss of $3.26 per share, while analysts polled by LSEG forecast $2.96. The company's third-quarter revenue of $18.10 billion beat forecasts of $18.01 billion, however. Boeing's third-quarter loss is also a sign of improvement from the same period a year ago when the company shed $5.49 per share. Boeing also said it expects to deliver fewer 737 Max airplanes this year than previously expected.

— Brian Evans

T-Mobile shares were up more than 1% in the premarket after the cellphone carrier reported third-quarter earnings that exceeded analyst expectations.

The company earned $1.82 per share, beating an LSEG consensus forecast of $1.74 per share. Revenue of $19.25 billion, however, was slightly below estimates.

"This quarter's best-in-class customer and financial growth, including our industry-leading postpaid net customer AND account adds and highest cash flow in Un-carrier history, paint a clear picture of a durable and differentiated strategy that is working," CEO Mike Sievert said in a statement.

— Fred Imbert

Stock futures were under pressure in early trading as a more than 6% decline in Alphabet shares pressured the broader market. The tech giant's third-quarter earnings and revenue beat expectations. However, weakness in its cloud business sent the stock lower.

— Fred Imbert

Shares of semiconductor equipment firm Kokusai Electric surged on its debut on the Tokyo Stock Exchange on Wednesday.

The stock hit a high of 2,371 yen ($15.82) per share in early trade, almost 30% higher than the IPO price of 1,840 yen.

The IPO saw approximately 58.8 million shares sold, raising a total of 108 billion yen, and the IPO price values Kokusai at around 424 billion yen.

This is also Japan's largest listing since SoftBank's 2.4 trillion yen listing in December 2018, according to the Japan Times.

— Lim Hui Jie

Australia's consumer price index registered a 5.4% increase year-on-year for the third quarter, higher than the 5.3% expected by a Reuters poll, but lower than the 6% recorded in the second quarter.

This is the third straight quarter that the inflation rate has fell and comes ahead of the Reserve Bank of Australia's monetary policy decision on Nov. 3.

The country's statistics bureau said that inflation in the third quarter was led by rises in the price of automotive fuel, which rose 7.2%. This was followed by prices of electricity and rents, which climbed 4.2% and 2.2% year on year respectively.

— Lim Hui Jie

China on Tuesday took steps toward easing financing conditions for local governments, which have been at the crux of recent economic difficulties.

The central government said it formalized a process allowing local governments to borrow funds for the year ahead — starting in the preceding fourth quarter, according to an announcement published by state media.

On Tuesday, Chinese authorities also announced the issuance of 1 trillion yuan ($137 billion) in government bonds for natural disaster relief, according to state media. Xinhua, the official state news agency, also pointed out the deficit would increase to 3.8% from 3%.

Earlier on Tuesday, Bloomberg reported, citing sources, that Chinese President Xi Jinping made his first known visit to the People's Bank of China since taking the top leadership role. CNBC was not able to independently confirm the report.

Futures for China stocks were up across the board, with that of Hong Kong-traded stocks up by about 2.5% or more as of Tuesday evening, according to Wind Information data.

— Evelyn Cheng

Michael Townsend, managing director of legislative and regulatory affairs at Charles Schwab, said Tuesday that he wouldn't be surprised if the U.S. federal government shuts down next month, but that Wall Street would likely shrug it off like it has in prior years.

"I'm not really worried about how the market will react if we do have a shutdown," Townsend said at Schwab's Impact conference in Philadelphia.

Townsend's comments came shortly after Rep. Tom Emmer of Minnesota dropped his bid for Speaker of the House. The continued failure to find a Speaker means that Rep. Patrick McHenry of North Carolina could end up getting some temporary powers in order to help Congress operate, Townsend said.

The Schwab expert also said that the federal deficit is becoming a bigger factor in markets due to higher interest rates but that there is not urgency in Washington to address the budget shortfall in a significant way.

"The changes in spending that even Republicans are talking about are tiny drops in the bucket compared to these big issues," Townsend said.

— Jesse Pound

Check out the companies making headlines in extended trading.

Microsoft — Shares jumped 2.5% after the maker of Windows software and Xbox video games reported fiscal first-quarter results that topped analysts' estimates. Microsoft posted earnings per share of $2.99 on $56.52 billion in revenue. Meanwhile, analysts had forecast EPS of $2.65 on $54.50 billion in revenue, according to LSEG, formerly known as Refinitiv. Microsoft's profit jumped due to slower operating expense growth, as well as better-than-expected revenue from its Azure cloud segment. 

Alphabet — The Google and YouTube parent fell more than 6% despite beating analysts' estimates on both top and bottom lines in the third quarter. Revenue growth reaccelerated to 11% from the previous quarter, the first time revenue reached double digits in four quarters. However, revenue from Google Cloud came in at $8.41 billion, well below consensus estimates of $8.64 billion, according to StreetAccount. 

Snap — Snapchat's parent inched higher after its third-quarter results. Snap posted earnings of 2 cents per share on revenue of $1.19 billion. Analysts polled by LSEG had estimated a loss of 4 cents per share on revenue of $1.11 billion. CEO Evan Spiegel highlighted a return to sales growth during the quarter. Shares had initially surged as high as 20% in postmarket trading, before reversing gains as investors processed news that some advertisers had paused spending after the onset of the Israel-Hamas war.  

The full list can be found here.

— Hakyung Kim

U.S. stock futures made just slight moves Tuesday night.

Futures tied to the Dow Jones Industrial Average added 40 points, or 0.1%.

Meanwhile, S&P 500 and Nasdaq 100 futures ticked down 0.1% and 0.2%, respectively.

— Hakyung Kim