Home Trade industry The S&P 500 closes lower on Wednesday after two days of strong gains

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

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US stocks fell on Wednesday as Wall Street failed to hold on to strong gains from the past two sessions.

The Dow Jones Industrial Average fell 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 slipped 0.25% to 11,148.64.

“It’s a moment of pause for the market to reflect on the sustainability of the rally of the past two days,” said Yung-Yu Ma, chief investment strategist for BMO Wealth Management. “The market is pricing that it will take a really long time for the Fed to pivot dovishly. Yes, the JOLTS number was extremely welcome, no doubt. But it’s really the tip of the iceberg in terms of what the Fed needs to take a softer tone.”

“There is a certain 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 fell from multi-year highs. Yields rose sharply on Wednesday, with the benchmark 10-year Treasury yield rising above 3.7% after briefly dipping below 3.6% in the previous session. This put pressure on stocks for much of the day.

Private payrolls rose by 208,000, ADP said in its latest report, beating a Dow Jones estimate. Traders are eagerly awaiting Friday’s release of the nonfarm payrolls report. The September ISM services index was also released on Wednesday and showed solid growth.

Some market participants wondered if the markets had finally priced in after the steep declines of the previous quarter.

“The Q3 earnings release is not far away and it’s definitely in market psychology that the Q2 earnings season has helped stabilize the markets,” Ma said. “There was a lot of pessimism about the market from which it was able to rally quite strongly for a couple of months right now there’s also this hope that earnings season can stabilize the market and maybe come to the rescue again, the way it did it last term.”