By Yasin Ebrahim
Investing.com – The S&P 500 reversed its intraday gains to close lower Wednesday as tech stocks failed to take advantage of falling bond yields, with analysts warning of further choppy trades ahead.
The S&P 500 was down 0.53%, the Dow Jones Industrial Average fell 0.01%, or 3 points, the Nasdaq Composite was down 2.01%.
Unlike in recent sessions, falling United States 10-Year yields didn't prove to be a savior for growth stocks, as a sea of red washed over highly-valued tech stocks.
The so-called Fab 5 tech stocks including Google-parent Alphabet (NASDAQ:GOOGL) were in the red. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), and Facebook (NASDAQ:FB), which collectively make up a quarter of the S&P 500, ended lower.
Intel (NASDAQ:INTC), meanwhile, gave up its gains to fall 2% as the chipmaker unveiled a $20-billion spending plan to build two new factories that will bolster the U.S. chip supply chain to some of the biggest firms including Microsoft and Google.
The wild swings in the stocks are expected to continue as markets search for direction.
"The markets are trying to find their next direction / path here- and will typically trade in a choppy, range-bound manner until they do so," Janney Montgomery Scott said in a note. " Our work currently suggests that despite any oversold rallies ahead, investors should remain on guard for further volatility ahead."
But it wasn't all doom and gloom as cyclicals, which some have claimed is fast turning into the growth trade, climbed.
Financials, industrials and energy racked up gains, with the latter receiving a boost from a rebound in oil prices despite a surprise weekly build in U.S. stockpiles.
Crude oil inventories climbed 1.9 million barrels last week, compared with economists forecasts for a draw of 272,000 barrels.
Airlines and cruise lines, meanwhile, pared gains.
United Airlines Holdings (NASDAQ:UAL) and Delta Air Lines Inc (NYSE:DAL) closed slightly lower. Carnival (NYSE:CCL) and Royal Caribbean Cruises (NYSE:RCL), which had gained more than 4% intraday, ended in the red.
The Centers for Disease Control said its no-sail order would continue until November, despite cruise lines calling for a phased renewal of sailings from U.S. ports in early July.
The backdrop of mostly weaker economic data following underwhelming durable goods orders and marketing activity data did little to stifle the climb in cyclicals amid optimism the recovery remains on track.
"We expect that there will be a broad rebound next month that will reflect a resumption the ongoing rotation into industrial capex investment from tech-oriented orders," Jefferies (NYSE:JEF) said.
On the earnings front, GameStop (NYSE:GME) fell 33% after the company said it would tap shareholders for more money via an equity offering and reported fourth-quarter results that fell short expectations. The company also failed to provide an update on its plans to pivot to digital.
Still, Wall Street appears to be warming up to Gamestop's recent jump in valuation. Jefferies upgraded its price target on the stock to $175 from $15, though maintained its hold rating.
In other news, Walt Disney Company (NYSE:DIS) said it would be hiking prices for its Plus streaming services in the U.S. from Friday. Its shares fell 2%.