Wall Street stocks wobble as tech shares dip and oil prices retreat

U.S. stocks moved sideways in afternoon trading on Wednesday, with the S&P 500 down 0.1% and the Dow Jones Industrial Average up 0.3% to 165 points, while the Nasdaq composite fell 0.4%. The market’s volatility was driven by a third consecutive day of losses in major technology shares, which have been a key driver of the year’s rally.

Nvidia dropped 1.2% after a 4.1% decline on Tuesday, and Micron Technology fell 3.6% ahead of its earnings release, following a 13.2% slide the previous day. Microsoft slipped 0.9%. Alphabet, the parent of Google, rose 0.8% as it prepared to replace Verizon in the Dow, becoming the fifth member of the so-called Magnificent 7.

"The next phase of the AI investment cycle is beginning to collide with market discipline," said Jason Vaillancourt, chief portfolio strategist at Columbia Threadneedle, in a research note.

Oil prices kept falling as diplomatic talks between the United States and Iran progressed. Brent crude slipped 3.6% to $74.02 a barrel, and U.S. crude fell 3.8% to $70.46. Energy firms led the losers, with Exxon Mobil down 2.3% and Chevron down 2.4%.

Homebuilders gained, boosted by recent legislative support: KB Home surged 16.4% and D.R. Horton rose 6.5%.

Treasury yields eased, with the 10-year rate falling to 4.40% and the 2-year to 4.14%, reducing some pressure on equities. Nonetheless, yields remain elevated as the Federal Reserve signals a possible rate hike by year-end. Markets await Thursday’s Personal Consumption Expenditures price index, expected to show a 4.1% year-over-year increase, the highest in three years.

"Thursday’s PCE is set to take on greater importance for markets, especially since Federal Reserve Chair (Kevin) Warsh was emphatic in last week’s meeting about the central bank’s desire to achieve price stability," wrote Rick Gardner, chief investment officer at RGA Investments.

Gold prices fell 3.8% to just under $4,000 an ounce, down from above $5,000 earlier in the year, reflecting a shift in investor risk appetite. European and Asian markets posted mixed results.