US stocks move lower, cooling off a day after broad rally

NEW YORK — Stocks fell in afternoon trading on Wall Street Wednesday, a day after a broad rally snapped a three-day losing streak.

The S&P 500 fell 0.7% as of 1:21 p.m. Eastern. The Dow Jones Industrial Average fell 274 points, or 0.8%, to 34,715 and the Nasdaq fell 1.2%.

Technology and communications stocks were the heaviest weights on the broader market. Microsoft fell 1.1% and Facebook’s parent, Meta, shed 3%.

Bond yields were stable. The yield on the 10-year Treasury remained at 2.04% from late Tuesday.

The potential for an escalating conflict between Russia and Ukraine has so far been a key concern for investors this week. Broader markets rallied on Tuesday after Russia claimed to remove some of its troops amassed on the Ukraine border. Tensions still remain high as officials from NATO and the West cast doubt on those claims.

Energy prices have been particularly volatile so far this week. Russia is a major energy producer and a military conflict could disrupt supplies and jolt markets. U.S. benchmark crude oil prices rose 2.2%, reversing course from a 3.6% slump on Tuesday. Energy stocks gained ground on the reversal. ConocoPhillips rose 1.6%.

European markets were mostly lower.

Wall Street is also keeping its focus on the Federal Reserve. In the afternoon, the central bank will release minutes from its latest policy meeting and potentially reveal more clues about the next steps it plans on taking in raising interest rates to fight inflation. Traders see a 52% chance for a first hike in March of half a percentage point, double the traditional move.

Rising inflation has been crimping profits and revenue for businesses in a wide range of industries. Many companies have been raising prices to offset the costs, including cereal maker Kellogg. That has raised concerns that consumers could eventually pull back spending, though the latest report from the Commerce Department shows that retail sales remained strong in January as the threat of the omicron variant of COVID-19 faded.

The government reported that retail sales surged a seasonally adjusted 3.8% last month, whizzing past the projections of most economists. That compared to the prior month when sales slid 2.5%.

Investors brushed off the encouraging retail sales data, but the results and other solid economic updates remain reassuring for the bigger economic picture as the Fed starts tightening its interest rate policy,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.

“The Fed is moving, period,” she said. “That’s happening no matter what, so it’s better if along the way you have economic data that remains resilient.”

Wall Street is also monitoring the latest corporate earnings reports to gauge how companies are handling supply chain problems and pressure from rising inflation.

Airbnb rose 4.5% after reporting strong financial results and giving investors an encouraging revenue forecast.

DoorDash will report its latest results late Wednesday afternoon and Walmart will report its results on Thursday.