US equities nearly erased early losses that were driven by fears of US-Iran war escalation that pushed energy prices higher.
The tech-heavy Nasdaq 100 closed 0.3% higher and the S&P 500 declined 0.3%, paring a drop of as much as 1.1% that put it on track to test its 50-day moving average. Materials, consumer discretionary and financials were the biggest laggards.
US energy stocks rallied after US President Donald Trump said a tentative ceasefire with Iran is "over" and a "waste of time." The remarks came shortly after the US launched a new wave of strikes against Iran and revoked a waiver that allowed the sale of Iranian oil.
Brent crude rose 5.9% sending stocks like Chevron Corp., Venture Global Inc., Diamondback Energy Inc. higher.
ALSO READ: Brent Breaches $80 A Barrel Even As Trump Says Oil Prices 'Will Come Down Very Big'
"For now, we will consider this a short-term reversal. We have no insight as to behind-the-scenes negotiations but do maintain a view that President Trump is focused on bringing this conflict to an end," Scott Chronert, head of US equity strategy at Citigroup Global Markets Inc wrote in a note Wednesday. "To be sure, a sentiment shift in favor of the broadening call, particularly as Tech has faltered of late, will be tested."
| Meanwhile, market strategist Ed Yardeni said the rupture in the ceasefire between the US and Iran risks sparking a fresh acceleration in price growth, which in turn could compel the Federal Reserve to raise interest rates. A few Fed officials in their most recent policy meeting said there was a case for raising interest rates, though they ultimately supported the decision to leave them on hold. More generally, minutes of the Federal Open Market Committee's June 16-17 meeting released Wednesday reflected growing concern among policymakers over inflation just as worries over the labor market slightly receded. US stock markets have recently been shaped by volatile swings as investors switch between dip-buying and de-risking over questions on how long the rally in semiconductor stocks and other AI-exposed names can power ahead. Positive earnings news may provide support for stocks, with strategists expecting a strong second-quarter reporting season for S&P 500 companies. Among notable single stock movers, Bloom Energy Corp shares extended their drop after Hunterbrook Media said in a report on the company that its Hunterbrook Capital arm is short the stock. Alcoa Corp. and Vale SA shares ended lower as Morgan Stanley analyst Carlos de Alba downgraded them on expected metal surplus and lower prices. And Dollar Tree Inc shares gained after analysts at Raymond James and Goldman Sachs upgraded the stock. Shares of DraftKings Inc. and Flutter Entertainment Plc briefly spiked to session highs intraday Wednesday after Michael Burry, the investor made famous in The Big Short, said he bought shares of both companies in a Wednesday Substack post. In other corporate news, Apple Inc., following through on a pledge to boost spending on US-made components, said its expanded agreement with Broadcom Inc. is expected to top $30 billion. OpenAI is set to release its most advanced model widely on Thursday and is expanding its preview globally, the company said. And Jeff Bezos' Blue Origin LLC is embarking on its first external fundraising round, according to people familiar with the matter, seizing on the enthusiasm ginned up by archrival SpaceX's record initial public offering. Sectors to watch:
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