By Johann M Cherian and Avinash P
Sept 23 (Reuters) - Wall Street's main indexes fell on Wednesday, as crude oil prices resumed their uptrend and bond yields gained, while investors awaited a breakthrough in talks to end the Middle East conflict ahead of the high-stakes US-China summit.
Brent Crude prices climbed over 1% after five straight sessions of declines, though they remained pinned near a two-week low. [O/R]
Yields on the two-year and 10-year government bonds ticked higher, adding to market
concerns that borrowing costs will remain elevated for longer.
"The market is in a limbo right now ... because bond yields and oil prices are up," said Sam Stovall, chief investment strategist at CFRA Research.
Chip-related companies were under pressure early on, including AMD, Nvidia and Intel. The broader Philadelphia chips index shed 1.5%.
Meta Platforms rose 1.5%, building on its more than 10% jump so far this week following strong reception of its AI assistant Muse, which analysts say could benefit tech infrastructure stocks, while also spurring AI disruption chatter in pockets of the market.
Top lenders, including JPMorgan Chase and Goldman Sachs, steadied a day after clocking steep losses. The broader S&P 500 Financials sector was flat after logging its biggest daily drop since March on Tuesday.
The materials sector lost 0.9%, with miners, including Newmont, leading declines as metal prices fell against a stronger dollar.
At 09:46 a.m. ET, the Dow Jones Industrial Average fell 142.45 points, or 0.27%, to 51,721.24, the S&P 500 lost 20.66 points, or 0.27%, to 7,743.98 and the Nasdaq Composite lost 114.33 points, or 0.41%, to 27,133.38.
In the previous session, the tech-heavy Nasdaq notched its first intraday record high since early June, as optimism around AI remains a dominant theme on Wall Street.
But markets pulled back on Wednesday, and traders are now awaiting updates from US and Iranian officials after their mediators commenced negotiations on the sidelines of the UN General Assembly on Tuesday.
Chinese President Xi Jinping is expected to arrive in Washington later in the day on a state visit. The agenda includes extending the trade truce reached last year between the two superpowers, AI regulation and US arms sales to Taiwan.
He is also expected to meet several top executives, including those from General Motors, Meta, Apple, Amazon and Tesla.
Federal Reserve Governor Michael Barr is expected to speak later in the day and his remarks will be scrutinized for clues on the policy outlook.
Increasing AI spending and higher energy costs from the US-Iran war have led policymakers at the Federal Reserve to flag the need to keep interest rates restrictive for longer, following last week's decision to hike rates.
Traders are now pricing in a 50% chance that interest rates could be hiked by at least 25 basis points next month, the CME Group's FedWatch Tool showed.
A survey, meanwhile, showed US business activity raced to a more than five-year high in September.
On the earnings front, casual dining chain Cracker Barrel added 3.8% after beating fourth-quarter sales estimates.
Paychex dropped 5.4% after the HR and payroll services provider said that its largest segment missed first-quarter revenue estimates.
Declining issues outnumbered advancers by a 3.26-to-1 ratio on the NYSE and by a 2.62-to-1 ratio on the Nasdaq.
The S&P 500 posted 12 new 52-week highs and 24 new lows, while the Nasdaq Composite recorded 17 new highs and 55 new lows.
(Reporting by Johann M Cherian, Avinash P and Shashwat Chauhan in Benglauru; Editing by Joyjeet Das and Shinjini Ganguli)
