Nasdaq, S&P 500 end lower as investors sell tech, buy less pricey sectors

The Nasdaq and S&P 500 fell on Wednesday as investors sold tech stocks and moved into less highly valued sectors, as they also awaited remarks from Federal Reserve officials at their Jackson Hole symposium this week.

Tech stocks, which drove much of the recovery from Wall Street's April selloff, have been pulling back. The S&P 500 technology index trimmed early losses to end the session down 0.8%.

Seven of the 11 S&P 500 sectors rose, led by energy, healthcare and consumer staples.

"A broader lens tells you it's more of a rotation than a true sell off," said Allspring's senior portfolio manager, Bryant van Cronkhite. "Tech valuations look extended in the context of inflated spending today. Number two, I would say that there are a lot of pockets of the market that look very attractive from a valuation standpoint and they've been broadly ignored."

The Dow Jones Industrial Average rose 16.04 points, or 0.04%, to 44,938.31, the S&P 500 lost 15.59 points, or 0.24%, to 6,395.78 and the Nasdaq Composite lost 142.09 points, or 0.67%, to 21,172.86.

Volume on U.S. exchanges was relatively light, with 15.5 billion shares traded, compared to an average of 17.7 billion shares over the previous 20 sessions.

Analysts listing other factors behind the tech sell-off mentioned OpenAI CEO Sam Altman's comments last week about artificial intelligence stocks being "in a bubble," and a Massachusetts Institute of Technology study that showed many tech companies were struggling to translate AI into actual profits.

Some investors also worried about government interference in the private sector. President Donald Trump's administration is looking into taking equity stakes in chip firms such as Intel , weeks after unprecedented revenue-sharing deals with Nvidia and AMD.

Nvidia slid 0.1% and Advanced Micro Devices fell 0.8%, while Intel and Micron fell between roughly 7% and 4%. Nvidia's quarterly results on August 27 are keenly awaited for clues on demand for artificial intelligence.

All megacap tech stocks fell. Nvidia's quarterly results on August 27 are keenly awaited for clues on demand for artificial intelligence.

Apple and Alphabet also came under pressure, closing down roughly 2% and 1.1%, respectively.

Minutes from the Fed's July meeting, where interest rates were left unchanged, showed almost all policymakers viewed it as appropriate to maintain the target range for the federal funds rate at 4.25% to 4.50%, despite two dissenters.

The central bank's annual conference in Jackson Hole, Wyoming, kicks off on Friday, with Chair Jerome Powell expected to speak. His remarks will be closely watched for policy signals. Investors have been pricing in a 25-basis-point rate cut in September, according to data compiled by LSEG.

Meanwhile, investors also monitored Trump's call for the resignation of Fed Governor Lisa Cook, with the president citing allegations that she was involved in mortgage fraud.

Earnings from big retailers, seen as a barometer for the health of the American consumer, are also due this week as sentiment has taken a hit from concerns that tariffs could drive prices higher.

Target tumbled 6.3% after the company named a new CEO and retained its annual forecasts that were lowered in May.

Cosmetics giant Estee Lauder fell 3.4% after tariff-related headwinds weighed on its annual profit forecast.

Declining issues outnumbered advancers by a 1.09-to-1 ratio on the NYSE. There were 161 new highs and 61 new lows on the NYSE.

The S&P 500 posted 22 new 52-week highs and no new lows while the Nasdaq Composite recorded 37 new highs and 119 new lows.