The Nasdaq Composite fell for a second session Wednesday to start the year, building on its worst daily performance in nearly three months.

The tech-heavy index lost 1.18% to close at 14,592.21, marking its fourth consecutive losing day. The S&P 500 slipped 0.80% to end at 4,704.81. The Dow Jones Industrial Average slid 284.85 points, or 0.76%, finishing at 37,430.19.

The Nasdaq is coming off its worst day since October, dragged down by major technology stocks and a nearly 4% decline in Apple after Barclays downgraded the iPhone maker. Apple shares dipped another 0.8% on Wednesday.

Other tech stalwarts Nvidia, Tesla and Meta all declined Wednesday. This pullback also came as the U.S. 10-year Treasury yield briefly rose above the key 4% mark. It was last trading around 3.91%.

Investors appeared to be selling last year's tech winners, which soared as the market anticipated easing monetary policy in 2024. But with uncertainty around when the Federal Reserve will finally begin cutting rates, investors seem to have curbed their enthusiasm.

"Long term, I'm still very bullish. But near term I just worry that everybody is coming into the year feeling too good," Steve Eisman, a senior portfolio manager at Neuberger Berman profiled in "The Big Short" said on CNBC's "Fast Money" on Tuesday.

Short-term corrections are nothing out of the ordinary in a market that's coming off of fresh highs and entering primary season, he added, noting that the longer-term setup looks positive on a six- to twelve-month horizon.

The major averages were also under pressure Wednesday afternoon following the release of the Fed's latest meeting minutes, as they showed the central bank was still not quite ready to lower rates.

"Participants generally stressed the importance of maintaining a careful and data-dependent approach to making monetary policy decisions and reaffirmed that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably toward the Committee's objective," the minutes stated.

However, officials indicated that they expect three quarter-percentage point cuts sometime this year, although a high degree of uncertainty remains around when these cuts are likely to occur.

The market's coming off a breathtaking year that saw all the major averages bounce back from a devastating 2022. The S&P 500 surged more than 24% and capped off its longest weekly winning streak since 2004, while the Nasdaq jumped 43% for its best year since 2020.

Stocks close lower on Wednesday

All three major indexes closed out the second trading day of the new year in the negative.

The S&P 500 shed 0.8% to finish at 4,704.81, while the Dow Jones Industrial Average slid 284.85 points, or 0.76%, to end at 37,430.19. The tech-heavy Nasdaq Composite lost 1.18% to close at 14,592.21.

— Lisa Kailai Han

Oil rises more than 3% as U.S. warns Houthis, OPEC pledges unity

Oil prices rose more than 3% on Wednesday as the U.S. warned Houthi militants against attacks in the Red Sea and OPEC pledged unity to support market stability.

Libya's Sharara oilfield was also shut down due to protests, two engineers told Reuters.

The West Texas Intermediate contract for February gained $2.32, or 3.29%, to settle at $72.70 a barrel. The Brent contract for March added $2.36, or 3.11%, to settle at $78.25 a barrel.

— Spencer Kimball

Here are the 10 biggest themes Morgan Stanley sees for 2024

Morgan Stanley strategists Edward Stanley and Matias Ovrum shared their 10 biggest themes for 2024 in a recent note.

Here's the list:

1. "Eastern Giants (Re)awaken" — Japan and India will outperform.
2. "U.S. Net Liquidity Reversal" — Liquidity will decline, placing downward pressure on stocks.
3. "The M&A and IPO Revival" — Deal value in the primary and secondary markets could recover over 200% by 2025 if history repeats.
4. "Weather & Conflict Bottlenecks" — European consumers could see higher prices as El Niño forces ships to divert their trade flows.
5. "Renewable Recovery" — Renewable energy companies now look cheap versus forward growth.
6. "Carbon Capture Catalysts" — Scaling carbon capture will create investment opportunities.
7. "Autos — Peak China Concern to Battery Oversupply" — 2024's "bigger concern and opportunity" will be battery oversupply.
8. "AI — Generative to Edge; Enablers to Adopters" — More catalysts will emerge for edge AI players.
9. "Fintech Consolidation & Tokenization's Return" — 2024 could bring more meaningful consolidation and tokenization experimentation from corporates.
10. "Healthy Life Extension & AI in Healthcare" — Investor interest will broaden in 2024 to explore AI adoption within healthcare.

— Lisa Kailai Han

Markets are in a 'bad news is good news' place, says AmeriVet's Faranello

The recent market action and latest economic data is indicative of a somewhat counterintuitive trend, according to Gregory Faranello of AmeriVet Securities: Wall Street is treating bad news as good news.

ISM manufacturing is still in the 40s, and that's "definitely indicative in terms of what we're seeing on the inflation side. The JOLTS numbers, they continue to correct — which is constructive because ... those are fairly Fed friendly," the firm's head of U.S. rates said.

The Fed indicated last month it sees more three rate cuts taking place in 2024.

"They don't want to see the economy falling apart, but I think what they're saying is we're starting to see inflation come down now as a function of growth coming down, which is what they need," Faranello added. If Friday's jobs report is strong, "we could see the market back away from these rate cuts a little bit, which would ironically not be good news for overall market."

— Fred Imbert

Apple is expensive but has 'limited risk' of big decline, Bernstein says

Apple may be due for a relatively quiet year in 2024, but there is no reason for investors to panic, according to Bernstein.

Analyst Toni Sacconaghi said in a note to clients Wednesday that he was keeping a market perform rating on Apple and that other hardware stocks were more attractive, but added that the tech giant still seems like a relatively safe bet.

"We see risk-reward as relatively neutral to slightly negative, given that the company's valuation remains elevated vs. peers and history, we are below consensus on FY 24 revenues and believe the company will likely struggle to grow in FY 24 amid a muted iPhone cycle - that said, we see limited risk of a major de-rating," Sacconaghi wrote.

Shares of Apple were down less than 1% on Wednesday after falling more than 3% in the previous session.

— Jesse Pound

Gasoline futures rally 3.1% Wednesday and energy stocks gain 2.7% in 2024

Benchmark gasoline futures contracts climbed 3.1% Wednesday after an attack in Iran killed more than 100, further heightening tensions stemming from the war in Gaza and rebel attacks on Red Sea shipping.

The S&P 500 Energy index, meanwhile, has risen through the day Wednesday and is outperforming the rest of the market so far in 2024, climbing 2.7% while the S&P 500 has fallen 1.1%.

Energy stock gains over the first two days of January have been led by Marathon Petroleum (+7.0%), Williams Cos. (+4.2%), Valero Energy (+3.2%) and Exxon Mobil (+3.1%). Only two of the 23 energy stocks in the S&P 500 (Baker Hughes, EQT) are lower so far this year.

— Scott Schnipper

Fed minutes show rate cuts are likely, but path is still uncertain

The minutes from the Federal Reserve's December meeting showed that, while the central bank sees rates declining in 2024, but sees its current policy stance as appropriate.

"In their submitted projections, almost all participants indicated that, reflecting the improvements in their inflation outlooks, their baseline projections implied that a lower target range for the federal funds rate would be appropriate by the end of 2024," the document stated.

It also added: "Participants generally stressed the importance of maintaining a careful and data-dependent approach to making monetary policy decisions and reaffirmed that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably toward the Committee's objective."

— Jeff Cox

Safety first. Almost 9 out of 10 utility stocks in S&P 500 are higher in early 2024

Almost all of the utility stocks in the S&P 500 (26 out of 30) are higher to start 2024 as investors look for income-producing, safe havens amid the latest three-day slide in the broad market.

Gains in the S&P 500 Utilities Index in 2024 are so far being led by Eversource Energy (+4.1% YTD), Evergy (+2.8%), Dominion Energy (+2.8%), Xcel Energy (+2.5%) and WEC Energy (2.5%). Utilities' gains may be modest but the S&P 500 as a whole is off 1% so far in 2024.

— Scott Schnipper

Xerox, SoFi Technologies among Wednesday's biggest movers

These are some of the stocks making the most significant moves during Wednesday's session:

• Xerox – Xerox shares sank more than 9% after the digital printing company announced plans to cut 15% of its workforce in the first quarter as part of a broader restructuring effort.
• SoFi Technologies — The financial technology stock tumbled more than 13% following a downgrade by Keefe, Bruyette & Woods to underperform from market perform.
• Charles Schwab – Charles Schwab dropped nearly 4% after Goldman Sachs downgraded the brokerage firm.

Read the full list of companies moving midday here.

— Samantha Subin

Declining Fed liquidity could be an 'underappreciated' stock catalyst, Wolfe Research says

Investors may be overlooking one major upcoming headwind — a decline in Fed liquidity, according to Wolfe Research.

"We believe that rising Fed liquidity (for which bank reserves held at the Fed are the best proxy) has been a major (and very underappreciated) catalyst driving stocks higher over the past nine months," analyst Chris Senyek wrote in a Wednesday note.

He added that Fed liquidity rose by an approximate $450 billion in 2023, with $130 billion alone added since the end of October. Senyek attributed this uptick to a recent oversupply of T-Bills, which placed upward pressure on yields, and a flow of money from reverse repos [RRPs] into short-term treasuries and other high-quality assets.

However, Senyek warned that this positive dynamic is due to come to an end soon. Specifically, Fed liquidity should decline once reverse repo balances plateau, which would place downward pressure on stocks.

— Lisa Kailai Han

16 S&P 500 stocks hit new 52-week highs

16 stocks in the S&P 500 hit new 52-week highs during Wednesday's trading session.

Of these 16 names, 11 notched new all-time highs. Here are a few stocks that reached this milestone:

• T-Mobile US since the MetroPCS IPO in Apr, 2007
• Ameriprise Financial since its IPO in Oct, 2005
• General Dynamics since 1952, when it was incorporated and listed on the NYSE
• Regeneron Pharma since its IPO in Feb, 1991
• Vertex Pharma since its IPO in July, 1991

— Lisa Kailai Han, Christopher Hayes

Xerox to lay off 15% of workforce

Xerox shares sank more than 9% after the workplace technology and digital printing company announced plans to slash 15% of its workforce as part of a broader restructuring plan.

The cuts, slated to occur in the first quarter, will likely impact a little over 3,000 employees based on figures from the end of 2022 showing around 20,500 employees.

″The shift to a business unit operating model is a continuation of our client-focused, balanced execution priorities and is designed to accelerate product and services, go-to-market, and corporate functions' operating efficiencies across all geographies we serve," Xerox CEO Steven Bandrowczak said in the release.

— Samantha Subin, Ashley Capiit

Big pharma and biotech are huge outperformers in early 2024

Biotech and the largest pharmaceutical stocks are proving some of the biggest outperformers in early trading in 2024.

The S&P 500 Pharmaceutical, biotech and life sciences index is higher by 2.6% in the first two trading days of the new year, driven by gains in Moderna (+10.7%), Merck (+5.8%), Eli Lilly (+4.8%), Amgen (+4.4%), Regeneron (+4.2%), AbbVie (+4.0%), Pfizer (+3.7%), Gilead (+3.6%) and Johnson & Johnson (+2.6%).

The S&P 500 Health Care index, which includes medical equipment and other companies, is higher by 1.8% in 2024, against the 1.3% decline in the S&P 500.

— Scott Schnipper

Sherwin-Williams shares now fully valued, Baird says in downgrade

Baird downgraded shares of Sherwin-Williams Tuesday, noting that cost-driven margin expansion is priced into the stock at this point. The stock gained more than 31% in 2023.

At the same time, mortgage rates remain high, analyst Ghansham Panjabi wrote in a note to clients.

"While interest rates have corrected lower since 4Q23, the reality is that absolute mortgage rates are still at a multi-year high—which is likely to weigh on construction fundamentals, underlying a 'lower for longer' volume dynamic," Panjabi said.

The 30-year fixed mortgage rate is currently 6.72%, according to Mortgage News Daily. Shares of Sherwin-Williams were down nearly 3% in midday trading.

— Michelle Fox

Oil prices jump 3% on disruption to oilfield in Libya

Oil prices on Wednesday rose by more than $2 as major oilfield in Libya faces disruptions.

The West Texas Intermediate contract for February jumped about 3% to trade at $72.35 a barrel. The Brent crude contract for March popped nearly 3% to $78.08.

Protests in Libya have led to a reduction in output at Libya's Sharara oilfield, two engineers told Reuters.

Oil has been volatile this week with U.S. crude and the global benchmark falling more than 1% on Tuesday, despite renewed disruptions to shipping in the Red Sea.

Maersk has paused shipping in the crucial waterway until further notice due to repeated attacks by Yemen-based Houthi militants on vessels.

— Spencer Kimball

Real estate leads S&P 500 sectors lower

Real estate was the worst-performing sector in the S&P 500 to start the session, losing more than 1%. The move lower comes as Treasury yields ticked higher, with the 10-year yield crossing the key 4% mark.

Materials and industrials were also down 1.1% and 0.7%.

— Fred Imbert

Job openings near expectations; manufacturing gauge nudges up

Job openings were about in line with expectations, while the manufacturing sector remained in contraction, according to separate economic reports Wednesday.

The Labor Department's Job Openings and Labor Turnover Survey showed employment listings at 8.79 million, about in line with the Dow Jones estimate for 8.8 million. Layoffs and hiring totals moved lower.

On the manufacturing side, the ISM Manufacturing report registered a 47.4 reading for December, just above the 47.2 estimate and better than the 46.7 in November. The number represents the percentage of businesses reporting expansion for the month, so anything below 50 represents contraction.

—Jeff Cox

10-year Treasury yield ticks above 4%

The benchmark 10-year Treasury yield ticked back above 4% on Wednesday, reversing a downtrend seen toward the end of 2023.

The move put pressure on tech stocks and the S&P 500 real estate sector. It also comes ahead of the minutes from the Federal Reserve's December meeting.

— Fred Imbert

Stocks retreat to start the day

Stocks opened down on Wednesday, a day after the Nasdaq Composite cinched its worst daily decline since October.

The tech-heavy index slid 0.7%, while the S&P 500 shed 0.5%. The Dow Jones Industrial Average lost 105 points, or 0.3%.

— Lisa Kailai Han

‘Big Short’ investor Steve Eisman sees room for stock market disappointment

‘Big Short’ investor Steve Eisman worries that "everybody is coming into the year feeling too good" and sees room for stock market disappointment.

From enthusiasm surrounding the "Magnificent Seven" technology stocks to expectations for multiple interest rate cuts this year, the Neuberger Berman senior portfolio manager told CNBC's "Fast Money" on Tuesday there's little tolerance for things going wrong.

In 2023, "the market climbed a wall of worry the whole year," Eisman said. "So now, here we are a year later, and everybody including me has a pretty benign view of the economy. It's just that everybody is coming into the year so bullish that if there are any disappointments, you know, what's going to hold the market up?"

Fewer rate hikes than expected in 2024 could emerge as a negative short-term catalyst, the money manager said.

— Scott Schnipper, Stephanie Landsman

ValueAct agrees to back Disney board

Activist investor ValueAct Capital agreed to back Disney's board, handing the media giant a win as it deals with Nelson Peltz Trian, another activist.

"As legacy technologies transition to digital platforms, we believe Disney can lead the media industry forward," Mason Morfit, ValueAct Capital's CIO, said in a statement.

Disney shares were little changed in the premarket.

— Fred Imbert

It's time to sell risk assets in a 'Reverse Goldilocks' environment, according to HSBC

HSBC believes it's time for investors to cut their exposure to risk assets.

That's because the bank believes that following the latest Goldilocks rally, the next stage will be a return to a "Reverse Goldilocks" environment.

"Markets typically trade the direction of travel / rate of change. And that's down and negative. The Fed's dovish pivot in December amplifies this Goldilocks backdrop even more," analyst Max Kettner wrote in a Wednesday note.

The analyst added that he's since cut his overweight on equities to wait for a better reentry point in terms of investor positioning and sentiment. Specifically, within stocks he's decreased his exposure to U.S. and European assets to underweight from overweight.

— Lisa Kailai Han

Boardroom moves, bitcoin's slide sparking premarket movers

Here are some notable premarket movers on Wednesday:

Bloomin' Brands — Shares of the restaurant company rose more than 5% after the Outback Steakhouse parent announced it added two new members to its board.

Coinbase, Marathon Digital — Shares of crypto exchange Coinbase slid nearly 6%, while bitcoin mining company Marathon Digital tumbled 10%, as bitcoin's slide dragged down stocks tied to digital currencies.

Sofi Technologies — The fintech stock sank more than 7% after being downgraded to underperform from market performance by Keefe, Bruyette & Woods.

Check out more movers here.

— Jesse Pound

Apple slips for a second day

Apple shares were down for a second straight day, losing 0.5% in the premarket. That decline came after the tech giant dropped 3.6%, its biggest one-day decline since September, sparked by a Barclays downgrade.

— Fred Imbert

Europe stocks open mixed before turning higher

European stocks had a muted open, with the regional Stoxx 600 index starting the session flat before nudging 0.2% higher by 8:20 a.m. London time.

Sectors remained a mixed bag, with health-care stocks up 1.04% and technology and mining both down by around 0.6%.

The U.K.'s FTSE 100 was up 0.25% while France's CAC 40 dipped 0.1% and Germany's DAX was flat.

— Jenni Reid

China online gaming stocks gain after a report says regulatory official was removed

Hong Kong-listed shares of Chinese online gaming firms rose Wednesday after Reuters reported that China removed an official at a government body that oversees the gaming sector.

Shares of Tencent rose 0.5% while NetEase added 0.68%, with China's CSI Anime Comic Game Index climbing 0.82%.

The report, citing people familiar with the matter, said Feng Shixin was removed last week from his position as head of the publishing unit of the Communist Party's Publicity Department.

The department oversees the National Press and Publication Administration (NPPA) which in turn regulates China's video games sector.

China's NPPA had published draft rules in late December that sought to prohibit incentivizing daily sign-ins for games, among other revenue-generating practices.

The country softened its stance within days of publishing the draft following a rout in gaming stocks that saw Tencent losing over $43 billion in market cap.

Video game stocks were an outlier on Wednesday, with the broader Hang Seng index down 1.27%, while China's CSI 300 index fell 0.57%.

— Shreyashi Sanyal

BYD shares fall even as its 2023 total production tops Tesla's output

Shares of Chinese automaker BYD slipped 0.76% even as the company produced more new energy vehicles compared with Tesla in 2023.

BYD manufactured more than 3 million new energy vehicles in 2023, outstripping Tesla's 1.84 million units.

While total production surpassed that of Tesla, BYD manufactured 1.6 million battery-only passenger cars and 1.4 million hybrids, putting Tesla on top for battery-only output.

Most of BYD's cars sell in a lower price range than Tesla's.

Read the full story here.

— Evelyn Cheng

Shares of Apple suppliers in Asia slide after Barclays downgrades iPhone maker

Shares of Apple suppliers in Asia tumbled on Wednesday, tracking a 4% drop in the iPhone maker overnight after Barclays downgraded the stock.

Barclays cut Apple's rating to underweight and trimmed its price target to $160 from $161.

Samsung Electronics shares slid as much as 3.01%, leading losses on South Korea's Kospi that fell 1.78%. The South Korean electronics giant, as well as some of its subsidiaries, supply Apple with its screens and battery components.

Apple chip supplier Taiwan Semiconductor Manufacturing Corp also dropped as much as 2.02%, while shares of Hon Hai Precision Industry, which assembles iPhones and is known internationally as Foxconn, fell 0.48%.

— Lim Hui Jie, Shreyashi Sanyal

PGT Innovations gets $41.50 offer from Miter Brands, topping Masonite $41 bid

Window and door maker PGT Innovations received an unsolicited $41.50 a share cash buyout offer from Miter Brands, topping a Dec. 18 agreed upon offer of $41 a share from Masonite International.

PGT climbed another 4.6% postmarket Tuesday after dropping 1.2% during regular trading.

PGT's board, alongside its financial advisor Evercore, will "carefully review" the Miter offer "to determine if it is reasonably likely to lead to a superior proposal."

PGT first rejected a $33-a-share buyout offer from Miter in early October, according to reports from Reuters at the time. Reuters said Miter is backed by Koch Industries.

— Scott Schnipper

Office Depot/OfficeMax parent slides postmarket as activist leaves board

Office Depot and OfficeMax parent ODP Corporation fell 5% postmarket after a Jan. 2021 agreement with hedge fund HG Vora expired and Marcus Dunlop, an HG partner, left the ODP board effective Dec. 31, 2023.

HG Vora, which owns 3m ODP shares representing about 8%, remains "supportive of the Board's ongoing efforts to execute on its long-term strategy and shareholder-focused capital allocation plan," Dunlop said.

On Dec. 18, HG Vora disclosed an 18.5% position in Penn Entertainment, said it engaged in talks with management and the board to enhance shareholder value and asked for representation on the board, according to a 13D filing with the SEC.

— Scott Schnipper

AI differs from previous internet and VR bubbles, Bank of America says

The rising insurgence of artificial intelligence applications propelled technology stocks higher in 2024.

But some investors have been questioning the viability of the AI trend, comparing it to previous short-lived themes like the Internet bubble of the 1999s or the VR bubble of the 2020s, according to Bank of America's Robert Cheng.

The analyst, however, disagrees with these concerns.

"We believe AI is different because the key players are global CSPs [cloud service providers] and enterprises, vs. mostly start-ups focusing on consumer market during the Internet and the VR bubbles," he wrote. "CSPs/enterprises invest AI-related capex to enhance/create business models and increase sales/efficiency."

— Lisa Kailai Han

Bloomin' Brands pops 4% after appointing two directors

Outback Steakhouse owner Bloomin' Brands jumped 4% after the company named two directors to its board as part of an agreement reached with activist investor Starboard Value, which owns a roughly 10% stake in the company.

Both Dave George, former chief operating officer of Darden Restaurants, and Jon Sagal, a partner at Starboard, will join the board.

Bloomin' also announced it is forming an operating comittee on its board tasked with indeifying potential areas of improvement.

— Samantha Subin

Stock futures open little changed

Stocks opened little changed on Tuesday evening.

Futures tied to the Dow Jones Industrial Average rose just 14 points, while S&P 500 futures and Nasdaq-100 futures hovered near the flatline.

— Samantha Subin