U.S. stocks fell on Wednesday, with the tech-heavy Nasdaq leading losses after stronger-than-expected retail sales data gave the Federal Reserve more ammunition to tighten policy, while geopolitical tensions over Russia and Ukraine added to caution.
Eight of the 11 major S&P sectors fell, with technology and communication services leading the declines. The energy index jumped 2%, tracking crude prices.
Shares of ViacomCBS tumbled 20.3% after the media conglomerate missed profit forecasts, while announcing a change in its name to Paramount and unveiling a broad range of programming.
Data showed retail sales rose 3.8% in January, rebounding sharply from the previous month, led by a surge in purchases of motor vehicles and other goods. Economists had forecast a rise of 2.0%.
The numbers come ahead of minutes from the Fed’s meeting, due at 2 p.m. ET, with investors looking for more clues on the central bank’s plans to trim its massive balance sheet and hike interest rates.
“If the consumer can absorb, continue to spend and thrive throughout this inflationary period, that gives the Federal Reserve more leeway to be aggressive in its monetary policy,” said Keith Buchanan, portfolio manager at Globalt Investments in Atlanta.
Keeping geopolitical tensions high, U.S. Secretary of State Antony Blinken said Russia has been moving critical units closer to Ukraine’s border and that the United States has so far not seen any pullback of Moscow’s forces in the area.
Comments from Moscow saying more of its forces surrounding Ukraine were withdrawing had spurred a rally in risky assets on Tuesday. The Nasdaq had surged 2.5% on Tuesday, while the S&P 500 and the Dow Jones each ended more than 1% higher.
At 09:58 a.m. ET, the Dow Jones Industrial Average was down 192.81 points, or 0.55%, at 34,796.03, the S&P 500 was down 32.34 points, or 0.72%, at 4,438.73, and the Nasdaq Composite was down 179.72 points, or 1.27%, at 13,960.03.
Shares of big banks fell, with Goldman Sachs down 1.3%, while those of major growth names Apple Inc, Google-owner Alphabet Inc, Amazon.com Inc, Microsoft Corp, Meta Platforms Inc and Tesla Inc dropped between 0.8% and 2.7% after rallying strongly on Tuesday.
Waning benefits from stay-at-home demand saw Canadian e-commerce firm Shopify slump 16.8% after it forecast a slowing pace in first-half revenue growth, while Roblox Corp tumbled 24.0% after the gaming platform missed analysts’ expectations for quarterly bookings.
Airbnb, meanwhile, rose 2.7% after the short-term home rental company forecast better-than-expected first-quarter revenue on strong travel demand and longer stays.
Devon Energy Corp rose 5.0% after the oil producer reported fourth-quarter results above Wall Street estimates.
Declining issues outnumbered advancers for a 1.21-to-1 ratio on the NYSE and 2.08-to-1 ratio on the Nasdaq.
The S&P index recorded 15 new 52-week highs and three new lows, while the Nasdaq recorded 27 new highs and 42 new lows.