The S&P 500 slipped Wednesday, as a decline in cyclical sectors including financial and energy offset and an intraday rally in tech ran out of steam.
The S&P 500 fell 0.5% to end the day below its closing record of 4,574.79. The Dow Jones Industrial Average slipped 0.74%, or 265 points, while the Nasdaq was up 0.12%.
Energy fell more than 1% as oil prices were pressured by expectations for a jump in global crude supplies from Iran as Tehran and European Union agreed to resume talks on to revive the 2015 nuclear deal before month-end.
Oil prices were also pushed lower by data showing a larger than expected build in the U.S. weekly crude stockpiles.
Crude inventories rose by 4.3 million barrels for the week ended Oct. 24, well above analysts' expectations for a build of 1.9 million barrels.
Still, there are some who suggest that energy, which up about 16% year to date, likely has further room to run.
“I'm bullish on energy as underinvestment in energy projects should continue to support the supply and demand imbalance, substantially pushing crude prices higher,” Aptus Capital Advisors portfolio manager David Wagner told Investing.com in a recent interview.
“When you couple that with energy firms’ plans of returning capital shareholders, I just don’t see energy as being an underperformer,” Wagner added.
Financials were dragged lower by falling bank stocks as Treasury yields slipped, with the 10-year yield dropping below 1.6%, and the 30-year yield dipping below 3%.
As well as weaker bank stocks, a 7% slump in Capital One Financial (NYSE:COF) also weighed on the sector after the company's better-than-expected results were offset by concerns about rising expenses amid a ramp-up in marketing costs.
Wall Street analysts, however, remained constructive on Capital One, forecasting the ramp-up in marketing to lead to further growth.
"We view [higher marketing expenses] as positive driver future growth and a sign that management is becoming more confident in the outlook, though it is a near-term expense headwind," RBC said in a note.
Technology sold off late into the close, shrugging off a falling Treasury yields and a climb in Microsoft and Alphabet.
Alphabet (NASDAQ:GOOGL)'s third-quarter earnings beat was driven by strong performance in its digital advertising search business, which was less vulnerable to Apple (NASDAQ:AAPL)'s privacy changes. Its share price closed up about 5% higher.
"Search [was] the clear beneficiary from Apple's ATT [App Tracking Transparency], and the least exposed to mobile tracking and measurement issues," Wedbush said in a note.
Microsoft (NASDAQ:MSFT) delivered fourth-quarter guidance that topped expectations as its cloud business Azure continued to impress, growing more than 50% in the third quarter. Its shares gained nearly 5%.
Twitter (NYSE:TWTR) plunged more than 10% after reporting third-quarter earnings that fell short of Wall Street estimates.
Boeing (NYSE:BA), meanwhile, fell more than 1% after third-quarter results fell short estimates as the rebound in 737 Max demand was offset by production delays of its 787 Dreamliner jets as the aircraft manufacturing continues to address manufacturing flaws.
Robinhood Markets (NASDAQ:HOOD) slipped more than 10% to close below its IPO price of $38 a share after the brokerage reported quarterly results late Tuesday that missed expectations amid slowing cryptocurrency trading activity.
On the economic front, durable goods orders for September were better than expected amid smaller than expected decline in aircraft and autos orders.
"Headline durable goods orders were depressed by declines in the civilian aircraft and autos components, but both were smaller than we expected. Behind the headline noise, the 0.8% jump in core capital goods orders - the biggest since June - is very encouraging," Pantheon Macroeconomics said in a note.