U.S. stocks traded choppily Wednesday, with bank shares climbing and semiconductor stocks retreating. The S&P 500 closed down 0.2%, weighed by a significant drop in chipmakers like Micron and Intel, which fell 11% and 9% respectively. Investors parsed comments from Federal Reserve Chairman Kevin Warsh, who indicated inflationary risks have eased but remained non-committal on immediate rate hikes.

Economically sensitive sectors, including financials and real estate, outperformed as manufacturing data showed continued expansion in June. Meta Platforms also surged 8.8% on reports of its plan to build a cloud business selling excess AI capacity. The Dow Jones Industrial Average edged slightly lower, failing to hold Tuesday’s record close, while the Nasdaq Composite fell 0.7% on the tech pullback.

The benchmark 10-year Treasury yield pared earlier gains, settling at 4.474% following Warsh's remarks. Attention now shifts to Thursday's June jobs report, with economists forecasting 115,000 new positions. However, the upcoming consumer-price index reading in mid-July is considered a more critical factor for the Federal Reserve's future monetary policy decisions.