(Updates with market moves at the end of the day, and other changes, if any.)
The Nasdaq Composite fell Wednesday after logging back-to-back closing records, while bond yields surged as bets increased for another Federal Reserve interest rate hike in October.
The Nasdaq shed 1.1% to end the session at 26,936.04. The S&P 500 dipped 0.8% to 7,706.03, while the Dow Jones Industrial Average dropped 0.7% to 51,511.59. Except energy, all sectors were in the red, led by communication services and utilities.
Treasury yields rose across the board, with the 10-year yield up 13.5 basis points at 5.102%, while the two-year yield jumped 11.6 basis points to 4.893%.
Fed Governor Michael Barr on Wednesday called for additional interest rate increases, the latest central bank official sounding the alarm on inflation being stuck above the 2% goal. Last week, the Fed delivered its first rate hike in just over three years.
In remarks for an event hosted by the Chicago Fed, Barr expressed concern over US inflation not easing toward the target in a timely way, warning that risks are tilted to the upside.
"In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion," Barr said. "We want to support sustainable, durable growth in support of maximum employment, and price stability is crucial to that."
Markets are now pricing in a 69% probability that the Fed will lift interest rates again by 25 basis points in October, according to the CME FedWatch tool. That's up from 55% on Tuesday.
West Texas Intermediate crude oil was up 2.4% at $92.65 a barrel in Wednesday late-afternoon trade, while Brent advanced 4.4% to $103.58.
Iran President Masoud Pezeshkian said in his address at the United Nations General Assembly that his country will "never bow our head or bend at the knee," CNN reported. Pezeshkian called on other nations to work together to pursue peace in the face of what he described as "bullying," according to the report.
Chinese leader Xi Jinping was expected to arrive in Washington on Wednesday. Xi and US President Donald Trump are set to discuss trade, artificial intelligence and potentially the war in Iran.
US private-sector output growth accelerated to a 62-month high in September, while price pressures intensified, S&P Global's (SPGI) flash purchasing managers' index showed Wednesday.
Mortgage applications in the US fell last week as a key 30-year rate crossed 7% to reach the highest level in more than two years, potentially worsening ongoing affordability challenges.
In company news, Paychex (PAYX) shares were the worst performer on the S&P 500, down 8.8%. The human resources software provider reported fiscal first-quarter revenue growth in line with market expectations, while management reiterated its full-year outlook amid a tough comparison in the ongoing three-month period.
McDonald's (MCD) unveiled its NEXT strategy, setting new financial targets for the fast-food giant, including market share gains, restaurant efficiency and unit expansion to increase systemwide sales. The stock slumped 4.8%, the steepest drop on the Dow.
Cracker Barrel Old Country Store's (CBRL) fiscal fourth-quarter earnings increased year on year, partly driven by tariff refunds, while the restaurant chain's chief financial officer said its traffic trends were improving. The stock climbed 4.5%.
Spot gold fell 1.9% to $4,278.77 per troy ounce, while silver shed 2.5% to $64.89 per ounce.
