Stocks tumbled on Wednesday as investors cashed in some profits following the market's recent hot streak, and FedEx dragged the S&P 500 lower.

The Dow Jones Industrial Average slid 475.92 points, or 1.27%, to 37,082.00. The Nasdaq Composite was lower by 1.50% to 14,777.94. Both indexes ended a nine-day advance, and they had their worst day since October.

The S&P 500 declined 1.47% to 4,698.35, marking its worst day since September.

"Markets were becoming overbought, and a pullback like this is natural given those conditions," said Keith Buchanan, senior portfolio manager at Globalt Investments. "So it was more technical than fundamental."

FedEx was the biggest laggard in the S&P 500, losing 12%. The package delivery giant issued a disappointing revenue outlook for the fiscal year, and reported fiscal second-quarter results that fell short of expectations on the top and bottom lines. The Dow Jones Transportation Average, a price-weighted index of 20 stocks that includes FedEx, fell more than 2%

Google-parent Alphabet was among the best performers in the S&P 500, reaching a new 52-week high during the session; it gained 1.2%.

The pullback comes after a robust session Tuesday when the Dow and the Nasdaq Composite both registered nine straight days of gains. Since their late October closing lows and through Tuesday, the Dow Industrials climbed 15.9%, and the S&P 500 jumped 15.8%. The Nasdaq Composite had gained 19.1% in that period.

All three major averages remain on pace for a winning December and 2023 as investors look forward to proposed rate cuts from the Federal Reserve in the new year.

The S&P 500 has risen 2.9% this month and 22% year to date. The Dow has added 3.2% in December and 11.9% in 2023. The Nasdaq is up by 3.9% on the month and 41% on the year, putting it on pace for its best year since 2020.

— CNBC's Scott Schnipper contributed to this report.

Stocks close lower Wednesday

Stocks closed lower Wednesday, with the Dow Jones Industrial Average and Nasdaq Composite ending 9-day winning streaks.

The Dow Jones Industrial Average slid 475.92 points, or 1.27%, to 37,082.00. The Nasdaq Composite was lower by 1.50% to 14,777.94.

The S&P 500 declined 1.47% to 4,698.35.

— Sarah Min

Zero-day options and technicals could be the culprit behind late-day selling, says Miller Value’s John Spallanzani

Activity in the zero-day options space could have contributed to a late-day bout of selling around 3 p.m. ET, according to Miller Value's John Spallanzani.

Zero-day to expiration options expire on the same day that they are traded, and they give their owners the right but not the obligation to buy or sell the underlying asset at a set price.

Nearly a million options contracts on the S&P 500 are expiring on Wednesday with a strike price of $475, Spallanzani said on "Closing Bell." "Once we picked up $475, it seemed like the selling begot selling," he said.

He called the sudden decline "an air pocket." At its lowest point in the day, the S&P 500 dropped 1.23%, while the Dow Jones Industrial Average shed about 373 points, or 0.99%.

-Darla Mercado

Citigroup moves to cut its distressed-debt business, sources say

Citigroup will close its distressed-debt business as part of the ongoing overhaul that CEO Jane Fraser is leading, sources told CNBC's Hugh Son.

The group employs about 40 people, according to people with direct knowledge of the move.

Read the full story here.

— Jesse Pound

Fed may not cut interest rates until June, Morgan Stanley economists warns

Morgan Stanley said the next few inflation prints could be sticky and the Federal Reserve may not begin cutting interest rates until later than many expect.

"We think it will take until June for the Fed to have clear and convincing evidence inflation will return to the 2% target, and therefore begin cutting rates," Ellen Zentner, the firm's chief economist told clients.

That could be bad news for stocks, which have rallied this month to end an already-strong year. Investors have been growing increasingly optimism about the potential for the central bank to pull down rates starting in March.

CNBC Pro subscribers can read the full story here.

— Alex Harring

FedEx's stock pullback may spell trouble for the broader market, Wolfe Research says

A nearly 11% pullback in FedEx stock after the shipping company issued lower-than-expected forward guidance may be a troubling sign for the broader market, according to Wolfe Research.

"[W]hile volatile at times, the correlation between FDX and the S&P has been a solid one," Wolfe Research managing director Rob GInsberg wrote on Monday. "Now, it probably won't derail the year-end melt-up, but given the multitude of overbought conditions and stretched indicators, a market pricing in perfection just got a bit of troubling news."

— Brian Evans

Oil largely flat as traders weigh U.S. production against Red Sea threats

Oil prices were largely flat on Wednesday as traders weighed record U.S. production against threats to shipping in the Red Sea from militants.

U.S. crude rose 28 cents, or .38%, to settle at $74.22 a barrel, while Brent gained 47 cents, or .59%, to settle at $79.70 a barrel.

Oil prices rose more than 1% earlier in the day as traders worried that threats to shipping in the Red Sea from militants based in Yemen could disrupt crude supply. BP this week paused shipping through the Suez Canal due to safety concerns.

But traders' focus shifted to worries that the market might be oversupplied after the U.S. produced an estimated 13.3 million barrels per day of crude last week, a new record.

Oil markets have grown bearish as breakneck production outside OPEC collides with a weakening economy in China, with crude prices declining significantly since September highs.

— Spencer Kimball

Stocks accelerate losses in final hour of trading

Stocks accelerated losses in the final hour of trading, despite being positive earlier in the session.

The Dow Jones Industrial Average slid 312 points, or 0.8%. The S&P 500 declined 1.1%, while the Nasdaq Composite was lower by 1.2%.

— Sarah Min

Utilities weigh on S&P 500 this week

Utilities stocks have restricted gains for the S&P 500 this week.

Down about 0.1%, the sector is the only of the 11 in the broad index on pace for losses this week. By comparison, the S&P 500 as a whole has climbed 1%.

That underperformance has somewhat offset gains seen elsewhere in the index. For instance, communication services, the best performing sector this week, has jumped more than 4%.

Pinnacle West Capital and AES dragged on the sector, with both slipping more than 2% over the course of the week. On the other hand, NRG Energy has helped buoy the sector through its gain of nearly 3%.

— Alex Harring

Tesla is on track to be the most-bought security by individual investors in 2023, research shows

Tesla has become a retail investor favorite in recent years.

The stock is on pace to see the highest net inflows from individual investors of any security in 2023, according to data from Vanda Research. It comes amid a strong year for the stock as part of a group of outperforming mega-cap technology names coined the "Magnificent 7."

Everyday investors say they like Tesla because it's considered disruptive technology and future-focused. Click here to read the full story.

— Alex Harring

Caterpillar is the leading Dow performer

Caterpillar was the best performer in the Dow Jones Industrial Average, up by 1.5% in midday trading. It was trading at all-time high levels back to when it first began trading on the NYSE in 1929.

In contrast, Coca-Cola shares was the biggest laggard in the 30-stock Dow, down 1%.

— Sarah Min, Chris Hayes

Bitcoin miners ETF continues to surge

The Valkyrie Bitcoin Miners ETF (WGMI) jumped 9% on Wednesday as it looks to cap a blockbuster year with strong momentum.

The ETF entered the day with a total return of more than 250% year to date, making it the top performing non-leveraged or inverse ETF in the United States in 2023, according to FactSet.

Other crypto-related ETFs, including the VanEck Digital Transformation ETF (DAPP) and the Global X Blockchain ETF (BKCH), have also returned more than 200% this year.

But despite the strong performance, investors have been reluctant to embrace these products. The WGMI still has under $50 million in total assets.

The surging price of bitcoin has helped the bitcoin mining stocks, but many investors may be waiting on a bitcoin ETF instead of buying the mining funds.

— Jesse Pound

Google-parent Alphabet among 31 S&P 500 names hitting fresh highs

Google-parent Alphabet was among the 31 names in the S&P 500 hitting fresh highs on Wednesday. Here are some of the others:

• Alphabet A share trading levels not seen since April 2022
• Meta Platforms trading at levels not seen since Sept. 2021
• Netflix trading at levels not seen since Jan. 2022
• Amazon.com trading at levels not seen since April 2022
• Booking Holdings trading at all-time highs back to its IPO in April 1999
• Nordson trading at levels not seen since Dec. 2021
• Parker Hannifin trading at all-time high levels back to its IPO in 1964
• Quanta Services trading at all-time highs back to its IPO in Feb. 1998
• Trane Technologies trading at all-time high levels back through Ingersoll Rand's history, before its recent merger with Gardner Denver. 
• Westinghouse Air Brake Tech trading at all-time highs back to the merger of Westinghouse Air Brake Co and MotivePower Industries in 1999

— Sarah Min, Chris Hayes

Stocks making the biggest moves midday

Check out some of the companies making headlines in midday trading.

General Mills — The food products stock fell more than 2% after General Mills lowered its sales outlook for the full year. Revenue for the fiscal second quarter was also weaker than expected, coming in at $5.14 billion. Analysts surveyed by LSEG were anticipating $5.35 billion.

FedEx — FedEx shares sank more than 10% after the package delivery behemoth cut its revenue outlook due to weaker demand. Late Tuesday, the shipping giant posted quarterly results that fell short of Wall Street's expectations on the top and bottom lines. The company said it anticipates a low-single-digit decline in revenue for the fiscal year. That's down from previous guidance calling for flat sales. Shares of rival shipping company UPS dropped 1%.

Winnebago — Shares of the motorhome manufacturer stock fell 1.7% after Winnebago missed earnings expectations for the fiscal first quarter. The company reported $1.06 in adjusted earnings per share, while analysts surveyed by StreetAccount expected $1.18 per share. The company's revenue fell about 20% year over year.

Read the full list here.

— Brian Evans

Holiday shopping period should meet or exceed expectations, Morgan Stanley says

Trends around retail traffic and promotions are looking good as the holiday shopping season enters its final leg, according to Morgan Stanley

Retailers saw less of a lull than normal after Black Friday and are now seeing strength in the days leading up to Christmas, analyst Alex Straton said. She said holiday retail traffic should either meet or exceed the firm's initial outlook, which Straton said was cautiously optimistic.

"To us, the less-deep-than-typical post-BF lull & early momentum in the final 10-day stretch before Christmas bodes well for the rest of the season," said Straton, using an abbreviation for Black Friday. "That, coupled with season-to-date upside, points to an in-line to likely better than expected 4Q/holiday outcome in our view."

That recent performance marks a turn from the start of the month, which Straton said was more mixed for retailers.

— Alex Harring

Communication services bolsters S&P 500 as tech stocks rise

Communication services stocks buoyed the S&P 500 on Wednesday, underscoring technology's outperformance in the session.

The sector climbed 1.7%, making it the best performer of the 11 that comprise the broad index. The S&P 500 as a whole traded slightly above flat, meaning the sector's strength helped balance out losses seen elsewhere.

Alphabet led the index higher with a 3% advance. Paramount was the next biggest gainer, adding more than 2%.

To be sure, some communication service stocks bucked the trend. Notably, Live Nation was the worst performer in the session with a 2% slide.

More broadly, technology stocks outperformed in the session. The tech-heavy Nasdaq Composite added around 0.2%, while the Dow and S&P 500 both sat near their flatlines.

— Alex Harring

China ETFs hit fresh 52-week lows

Popular China ETFs fell on Wednesay to hit new 52-week lows.

The iShares China Large-Cap ETF slumped about 1.5%, led to the downside by declines from JD.com, China Merchants Bank, Meituan and China Tourism. All four stocks have fallen at least 40% this year, with the fund down 18% and headed for a third consecutive losing year.

The iShares MSCI China ETF also fell to lows not seen since November 2022, with the fund down about 16% year to date.

Elsewhere, the Shanghai Composite dipped about 1%. It's fallen 6% since the start of 2023 and headed for a second staight negative year.

— Samantha Subin, Gina Francolla

Consumer confidence climbs in December

Consumers are showing higher signs of confidence heading into the end of the year.

The Conference Board said Wednesday that its consumer confidence index climbed to 110.7 in December, an uptick compared to the downwardly revised 101 a month earlier. The index is a barometer for what Americans think of present economic conditions as well as their six-month outlook.

"December's write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns," Conference Board chief economist Dana Peterson said.

Consumers' view of current business and labor market conditions also ticked higher to 148.5 in December, up from 136.5 in November.

— Brian Evans

November existing home sales come in stronger than expected

November existing home sales came in stronger than expected.

Sales of previously owned homes in November rose 0.8% from the prior month to a seasonally adjusted annualized rate of 3.82 million units, according to the National Association of Realtors. Economists polled by Dow Jones were expecting a fall of 0.8% to 3.76 million units.

— Sarah Min

Alphabet rises despite broader market weakness

Alphabet shares rose more than 2% on Wednesday, despite weakness in the overall market.

The Information reported Tuesday that the company is planning to restructure its advertising sales team. Ahead of the 2024 election cycle, the search giant also said that it would restrict certain election-based queries on its chatbot known as Bard.

Along with Alphabet, Nvidia, Amazon, Apple and Meta Platforms inched marginally higher.

— Samantha Subin

Stocks open lower Wednesday

The major averages opened lower Wednesday.

The Dow Jones Industrial Average lost 76 points, or 0.2%. The S&P 500 fell 0.2%, while the Nasdaq Composite shed 0.1%.

— Sarah Min

Lowe's, Floor & Decor, Hayward slide premarket following Stifel downgrade

Lowe's, Floor & Decor and Hayward Holdings all fell fell roughly 1.5% premarket Wednesday following a downgrade to hold from buy at Stifel by analyst W. Andrew Carter.

"We are taking a more cautious view of our home improvement names balancing healthy long-term category dynamics against tepid near-term trends with valuations now sporting limited room for error given the outperformance following the October CPI release," Carter wrote Tuesday. "Growing confidence around easing rates has driven the outperformance, but the easing rates fall short of driving a meaningful improvement in our home improvement category outlook."

As a result, Stifel argues that any 2024 housing recovery will be "tepid" and see only "sluggish" improvement in housing sales as buyers and sellers grow accustomed to higher interest rates. Interest rates need to fall much further to encourage housing sales and refinancings, and that's unlikely unless unemployment rises, the firm said.

— Scott Schnipper

10-year Treasury yield falls below 3.9% to lowest since July

The 10-year U.S. Treasury yield fell Wednesday to its lowest level since July as traders assessed the path of future rate cuts from the Federal Reserve.

The yield on the benchmark 10-year Treasury note was last down around 4 basis points to 3.879%. Earlier in the session, it hit a low of 3.871%, or its lowest level since July 27 when the 10-year yielded as low as 3.839%.

— Sarah Min, Gina Francolla

FedEx, General Mills lead premarket movers

FedEx is the story of the morning on Wall Street, with the delivery stock falling 10% before the bell after a disappointing second quarter report.

Here are some other notable premarket movers:

General Mills — Shares of the food products company fell 3% after General Mills reported revenue for its fiscal second quarter that was light of expectations and said organic net set sales were down 2% year over despite stronger pricing.

Salesforce — The tech stock declined 1.3% after Wells Fargo downgraded Salesforce to equal weight from overweight.

Check out the full list here.

— Jesse Pound

Mortgage demand slips despite another drop in interest rates

Mortgage demand fell last week compared to the previous week, despite a continued drop in rates, according to the Mortgage Bankers Association's seasonally adjusted index. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.83% from 7.07%, with points increasing to 0.60 from 0.59 (including the origination fee) for loans with a 20% down payment, the group said Wednesday. Even with the recent decline, rates are still much higher than they were at the start of the Covid pandemic.

— Lisa Rizzolo

Here's what analysts have to say about FedEx after disappointing earnings, outlook

FedEx shares have taken a dramatic slide after the company lowered its full-year sales outlook as weaker demand hit sales. The packaging company's adjusted earnings per share and revenue also came out lower than estimates, driving shares lower by 9% after market close on Tuesday.

The stock continued to plunge on Wednesday morning, losing more than 12% in premarket trading. Here's what some analysts are saying about the company:

• Bank of America: Analyst Ken Hoexter maintained his buy rating and lowered his price target to $313, which implies 11.8% potential upside from the stock's latest close. Although margin expansion was weak, and the company sees thinner margins next year as well, the analyst said he sees strength in FedEx's 'DRIVE' program, which is focused on cutting expenses by improving operational efficiency.
• Wells Fargo: Analyst Allison Poliniak-Cusic expects FedEx's earnings results to pressure shares, but similarly said that progress in its cost-cutting initiatives continue to support the company's fiscal year 2024 outlook. Once the transformation is complete, Wells Fargo expects a "strong cash flow profile" with greater confidence potentially leading to a higher valuation. The firm kept its equal-weight rating on the stock.
• Barclays: Analyst Brandon Oglenski kept his overweight rating and reduced his price target to $310, noting especially poor performance in the company's Express unit, which is its largest, after being hit with lower demand and customers gravitating towards cheaper services. Margin improvement would take a 20% to 30% reduction in capacity from current operations, which the analyst said "just does not seem to be in the cards with current management plans."

— Pia Singh

FedEx drops 9% on disappointing earnings

FedEx's stock sank 9% after the package-delivery company posted disappointing quarterly results and trimmed its revenue outlook.

Adjusted earnings came in at $3.99 per share, falling short of the $4.18 expected by analysts polled by LSEG. The company reported $22.17 billion in revenue, versus the $22.41 billion estimated.

FedEx also said it expects revenues to decline in the low single digits for the fiscal year. That's down from the flat year-over-year sales previously forecasted.

— Samantha Subin, Leslie Josephs

Stock futures open little changed

Stock futures opened little changed on Tuesday evening.

S&P 500 futures dipped 0.06%, while Nasdaq 100 futures were flat. Futures tied to the Dow Jones Industrial Average slipped 20 points.

— Samantha Subin