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S&P 500 Pares Losses on Energy Rally, Dip-Buying in Tech

By Yasin Ebrahim

Investing.com -- The S&P 500 pared some losses Wednesday, driven by rising energy stocks and dip-buying in tech despite Federal Reserve officials pushing back against the idea of the pause on rate hikes.

The S&P 500 fell 0.1%, the Dow Jones Industrial Average was flat, or up 10 points points, and the Nasdaq was down 0.3%.

San Francisco Federal Reserve President Mary Daly said that the Fed’s goal to keep tightening monetary policy until interest rates are at a restrictive level “hasn’t really changed,” easing investor bets on a Fed pivot.

Interest rates had reached a point that was potentially a “little bit restrictive, or just at neutral,” Daly added, though insisted that “more rate increases [was] necessary” to bring inflation down.

The ongoing hawkish remarks from the San Francisco Fed president arrived as data showed U.S. services activity rebounded by more than expected in September, pointing to underlying economic strength.

Treasury yields climbed, but tech stocks fought back from session lows as dip buyers helped big tech move off session lows.

A climb in chip stocks also supported the broader move off the lows in tech, with Marvell Technology Group Ltd (NASDAQ:MRVL) and Taiwan Semiconductor Manufacturing (NYSE:TSM) up more than 2%.

Twitter Inc (NYSE:TWTR), meanwhile, fell 0.7% after rallying more than 22% a day earlier as the social media giant confirmed Tuesday that Musk had agreed to revive the deal to buy the company for $54.20.

The deal is expected to close “without any major issues over the next few weeks,” Wedbush said in a note, though noted that now the “hard part will be fixing it [Twitter] with monetization and subscriber engagement.”

Tesla Inc (NASDAQ:TSLA), however, fell more than 3% on expectations that Musk will have to sell more Tesla shares to fund the $44 billion Twitter deal.

As well as a fall in Tesla, consumer discretionary stocks were also weighed down by weakness in cruise line stocks.

Carnival Corporation (NYSE:CCL) fell 5%, while Royal Caribbean Cruises (NYSE:RCL), Norwegian Cruise Line Ltd (NYSE:NCLH) were down more than 3%.

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