US stock indexes closed lower on Wednesday. The S&P 500 Index fell 0.53%, the Dow Jones Industrials Index dropped 0.09%, and the Nasdaq 100 Index declined 1.07%. March E-mini S&P futures fell 0.56%, and March E-mini Nasdaq futures fell 1.08%.
The S&P 500 and Nasdaq 100 settled at their lowest levels in about a week and a half. Weakness in chip makers and the group of large technology stocks known as the Magnificent Seven weighed on the broader market.
Geopolitical concerns added pressure as markets considered a potential US response to unrest in Iran. Reuters reported that some US personnel were advised to leave the Al Udeid Air Base in Qatar. That facility was targeted by Iranian airstrikes last year following US attacks on Iranian nuclear sites.
Later Wednesday, President Trump stated he had received assurances Iran would stop killing protesters. This signaled he might delay a threatened military response to the demonstrations.
Heightened tensions pushed WTI crude oil to a 2.5-month high. Precious metals also jumped, with gold, silver, and copper reaching new record highs as investors sought safe-haven assets.
Stocks moved off their worst levels in the afternoon. A Federal Reserve Beige Book reported US economic activity increased at a "slight to modest pace" in most regions since mid-November. The report noted this marked an improvement over the previous three reporting cycles.
Stronger-than-expected US economic data provided some support. November retail sales rose 0.6% month-over-month, exceeding expectations. November producer prices increased 3.0% year-over-year, also above forecasts. December existing home sales climbed 5.1% month-over-month to a 2.75-year high of 4.35 million units.
Comments from Federal Reserve officials offered mixed signals. Philadelphia Fed President Anna Paulson said she anticipates rate cuts later this year, citing moderating inflation and stable labor markets. Conversely, Minneapolis Fed President Neel Kashkari said he sees no "impetus" for a rate cut this month, noting economic resilience.
The yield on the 10-year Treasury note fell 4 basis points to 4.14%. Demand for government debt was partly driven by safe-haven buying related to Iran tensions and the dovish comments from Paulson.
Overseas markets were mixed. The Euro Stoxx 50 fell 0.41%. China's Shanghai Composite dropped 0.31%. Japan's Nikkei Stock 225 rose 1.48% to a new all-time high.
In corporate movers, several Magnificent Seven stocks declined. Amazon.com, Meta Platforms, and Microsoft closed down more than 2%. Nvidia and Tesla fell more than 1%. Chip makers also slid, with Broadcom down over 4%.
Travel stocks fell after the US State Department said it would soon suspend visas for 75 countries. Airbnb closed down more than 5%.
Energy stocks climbed with higher oil prices. ConocoPhillips gained over 4%. Cryptocurrency-exposed stocks rallied as Bitcoin rose more than 3% to a two-month high.
On the earnings front, Wells Fargo & Co. fell more than 4% after reporting Q4 net interest income below consensus. Bank of America dropped over 3% on weaker-than-expected fixed income trading revenue.
LyondellBasell Industries led S&P 500 gainers, rising more than 6% after Citigroup removed a downside catalyst watch on the stock.