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The S&P 500 falls slightly on Wednesday after four straight days of gains

US stocks fell slightly on Wednesday after the Dow Jones and S&P 500 extended their rally in the previous session as investors watched developments in Ukraine and the bond market.

The S&P 500 fell 0.5% and the Nasdaq Composite lost 0.7%. The Dow Jones Industrial Averaged fell 63 points, or 0.2%.

Russia said on Tuesday it would reduce its military presence in parts of Ukraine, but several countries, including the United States and the United Kingdom, remain skeptical of Moscow’s commitment. Meanwhile, Russian attacks on Ukraine continued on Wednesday.

Crude prices, which have soared since the start of the war, climbed more than 3% to hit $107.83 a barrel on Wednesday. Germany has warned of potential natural gas rationing due to disputes with Russia.

Oil stocks rose, with Valero up more than 4% and Phillips 66 up around 3%.

Liz Ann Sonders, chief investment strategist at Charles Schwab, said rising oil prices could be a bearish signal for the broader market, even if it boosts energy stocks.

“We are already seeing signs of what I call a countercyclical inflation environment, sometimes called a cost inflation environment, where inflation is getting so high that it is starting to put pressure” on growth, Sonders said.

Elsewhere, shares of Apple, which have risen for 11 straight sessions, fell less than 1%. Procter & Gamble shares fell 1.3% following a downgrade by JPMorgan.

Semiconductor stocks were a weak spot for the market, with Marvell down 3% and Nvidia down more than 2%. Micron held steady despite a stronger than expected earnings report.

Wall Street is coming off a strong session, with the Dow Jones and S&P 500 posting their fourth straight day of gains on Tuesday. The Nasdaq Composite climbed 1.8% in the previous session and is now within 10% of its all-time high. The S&P 500 is up nearly 11% since mid-March.

However, many investment professionals are hesitant to ask for the go-ahead in the event of a market rebound.

“Above 4,600 in the S&P 500, markets have now breached the most fundamental valuation boundaries, and for this rally to continue, we will need to see real and real positive events (not just events that are not not as bad as feared),” Sevens Report’s Tom Essaye said in a note to clients on Wednesday.

Jeremy Siegel, a finance professor at the Wharton School of Business, told CNBC’s “Squawk on the Street” that the market is valued at around 20 times forward earnings.

“I mean it’s not cheap, but very reasonable in a very low interest rate environment, even if they’re going up,” Siegel said.

Several retail stocks were under pressure on Wednesday after disappointing quarterly reports, including Five Below and Chewy. On the positive side, Lululemon apparel stock jumped 5% after posting an upbeat forecast and announcing a share buyback program.

Investors also kept an eye on the bond market as yields on 5- and 30-year US Treasuries reversed on Monday for the first time since 2016. Historically, this reversal was a sign of a coming recession. , although it was not a good indicator of when the recession would come. Yet investors largely ignored the event.

On Tuesday, the main yield differential seen by traders, that between the 2-year rate and the 10-year rate, nearly reversed but remained positive. On Wednesday, the spread remained close to 2 basis points.

“The big debate right now is that at any time, recession could be on the horizon,” Stephanie Lang, chief investment officer at Homrich Berg, told CNBC. “Typically, you won’t see a recession for 20 months on average once a yield curve inverts. Our antennas are up, that recession risk is heightened; that doesn’t necessarily mean there’s will have one this year, although next year is more of a concern for us.”

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Wednesday was also a busy day of economic data. ADP’s payroll report says private companies added 455,000 jobs in March. Economists polled by Dow Jones expected 450,000. The final reading of fourth-quarter US GDP showed growth of 6.9%, below the preliminary reading of 7%.

Esther George, president of the Federal Reserve Bank of Kansas City, will speak before the Economic Club of New York.

The S&P 500 falls slightly on Wednesday after four straight days of gains

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