U.S. stocks churned near the flat line on Wednesday after major tech stocks gave back an early rebound.
The Nasdaq Composite and the S&P 500 held slight gains of 0.4% and 0.2%, respectively, while the Dow was flat.
Major tech shares rose at the open but lost ground as the morning progressed. Apple held on to a 1.5% gain, but Tesla and Amazon bounced between gains and losses. Activision Blizzard also lost some of its post-earnings pop to trade about 3.9% higher.
Outside of tech, General Motors shares climbed 3.4% in early trading after earnings blew past expectations. Exercise equipment maker Peloton fell 9% after announcing a recall of its treadmill product due to safety concerns.
The muted moves in the equity markets come ahead of a closely watched labor market report on Friday.
Private payrolls rose by 742,000 jobs in April, according to a Wednesday report from ADP. This result was below expectations of 800,000 jobs from economists surveyed by Dow Jones. ADP did revise its March report upward by 48,000 jobs.
On Tuesday, investors exited technology and growth stocks, pushing the Nasdaq Composite down 1.9%. Along with losses in Apple and Tesla, shares of Netflix lost 1.2%, and Microsoft dropped 1.6%. Amazon and Facebook shed 2.2% and 1.3%, respectively. Alphabet fell 1.6%.
The struggles for tech stocks come after a strong string of earnings for some of the biggest companies in the stock market failed to push the major indexes significantly higher.
“With the S&P 500 around 1% away from record highs, plenty of good news is priced into the market, so stocks look potentially vulnerable to disappointments,” UBS strategists said in a note.
There are a number of possible reasons for the downward pressure, including fears about rising inflation, concerns the Federal Reserve may have to taper monetary stimulus earlier than telegraphed, and the potential for tax hikes in the months ahead.
On Wednesday, The IHS Markit U.S. services purchasing managers index came in at 64.7 for April, ahead of the projected reading of 63.3, according to economists surveyed by Dow Jones. The ISM non-manufacturing index came in slightly under expectations at 62.7, however. PMIs are calculated such that readings above 50 represent expansion in an economic sector.
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On Tuesday, investors exited technology and growth stocks, pushing the Nasdaq Composite down 1.9%.