The S&P 500 and Nasdaq Composite closed lower Wednesday, with the broad market index fluctuating near its highest closing levels since August 2022.

The S&P 500 ticked down 0.38% to close at 4,267.52, and the Nasdaq Composite declined 1.29% to end at 13,104.89. The Dow Jones Industrial Average, the outlier among the major averages, added 91.74 points, or 0.27%, closing at 33,665.02.

Energy was the best-performing S&P 500 sector, rising about 2.6%. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and First Trust Natural Gas ETF (FCG) added more than 3% each.

Regional banks saw their share gains continue as the SPDR S&P Regional Banking ETF (KRE) rose more than 3%. Shares of PacWest Bancorp jumped 14.4%, while Zions Bancorporation added 4.5%.

Stocks have been boosted recently as the promise of artificial intelligence lifts tech names. Over the past three months, the S&P 500 is up more than 7%.

However, Crossmark Global Investments chief investment officer Bob Doll warned that despite the market rally in recent days, more impact from the Federal Reserve's interest rate hikes will likely be felt in the future.

"We still have leading economic indicators down 13-months in a row. We still have an inverted yield curve [and] liquidity issues," Doll told CNBC's "Squawk on the Street" on Wednesday.

"I think they're more there's more impact to come. … I would be a little cautious [and] not long-route rallies," he said.

The U.S. trade deficit continued to increase in April, but came in slightly below economists' expectations. The deficit could translate into lower GDP growth for the second quarter.

Correction: The SPDR S&P Regional Banking ETF was positive for the fourth session out of the past five. An earlier version misstated the number of consecutive winning days.

VIX volatility index touched lowest Wednesday since a month before 2020 lockdown

The Cboe Volatility Index, aka the VIX, briefly touched 13.77 on Wednesday, the lowest since Wall Street's so-called "fear gauge" reached an intraday low of 13.38 on Feb. 14, 2020 — one month before the U.S. entered lockdown due to Covid.

The index suggests investors aren't overly concerned about an earnings slump, elevated interest rates, an imminent U.S. recession, an estimated $1 trillion in Treasury bill issuance, air quality in New York City or much else.

-Scott Schnipper

S&P 500 industrial stocks rally back to early March highs

The S&P 500 Industrials Index rallied Wednesday to the highest since shortly before Silicon Valley Bank failed on March 10, another sign that recent stock market strength may finally be widening beyond the usual technology and AI suspects. The move may also reflect the view that the U.S. economy could potentially dodge a recession.

Late Wednesday, the S&P 500 Industrials were ahead 1.5% against the S&P 500's 0.3% decline. It was the group's highest level since March 8, just two days prior to the failure of Silicon Valley Bank.

The S&P 500 Industrials now stand less than 1.4% below their 52-week high set in February, and are almost 6% higher in June alone. The 14-day relative strength index (RSI) for the group is a shade more than 62 — well below the 70 threshold that might signal it's overbought.

Among the stocks posting some of the largest gains Wednesday were Stanley Black & Decker and United Rentals, which gained 6.1% and 4.4%, respectively. Caterpillar, Carrier Global and Nordson also rose by more than 3%.

— Scott Schnipper

Moving up to a neutral outlook from a modestly cautious view, says U.S. Bank Wealth Management

With the market showing signs of more resilience than many had expected earlier this year, investors can take a less-defensive stance, said U.S. Bank Wealth Management's senior investment strategist Tom Hainlin.

"[We're] witnessing the change in market leadership — it used to be pretty narrow, a handful of large tech companies. Today we're seeing small caps up another 2% [and] strength in areas like financials. Watching that performance broaden now has been a factor in us moving to a more neutral outlook now for the weeks and months ahead," Hainlin said.

"So we started the year being slightly cautious. We thought clients should have a little bit less than stocks, and a little more in things like utilities. And we just recently shifted that to where clients should just be allocated to what their normal long-term investment allocations are, between stocks and bonds, and things like real estate," Hainlin continued.

— Hakyung Kim

Mega-cap stocks underperform Wednesday

During what has been a strong day for small-cap names, mega-cap stocks have underperformed the market.

Shares of tech giants Microsoft and Google pared down 2.7% and 3.3%, respectively. Several semiconductor names also saw shares pull back after rallying the previous week. Nvidia lost 1.1%, while Qualcomm shares fell 1.2%.

Financial services companies Visa and Mastercard dropped 1.5% and 2.2%, respectively.

— Hakyung Kim

Small-caps rally shows the market is moving beyond the banking crisis, says LPL Financial

The Russell 2000 is up 1.7% Wednesday and almost 8% month to date, giving signs that the economy is strong than many investors had initially expected, according to LPL Financial's chief global strategist Quincy Krosby.

"Small-caps have traditionally served as a bellwether in terms of the broader economic landscape. With all the ongoing debate regarding the state of the economy, and concerns about an impending recession, steady interest in small-caps suggests the economy is more resilient than the headlines imply, or that a recession could be milder than initially projected," Krosby said in a Wednesday note.

"The market tends to 'get the news first,' and if flows into the Russell 2000 advance, this could be a significant market signal," Krosby added.

— Hakyung Kim

Stocks making the biggest moves midday

Check out the companies making the biggest moves midday:

Affirm — Shares of the payments company surged 6% after Affirm and Amazon announced a new compatibility feature. Affirm's Adaptive Checkout, which offers customers pay-over-time plans, will now be a payment option through merchants offering Amazon Pay.

Warner Bros Discovery — Shares popped 5% following the announcement that CNN CEO Chris Licht is leaving the company after a tumultuous reign of just over a year.

Dave & Buster's — Shares of the entertainment giant jumped 18% a day after Dave & Buster's posted a beat on earnings. The company reported first-quarter earnings of $1.45 per share, while analysts polled by Refinitiv called for $1.24 per share. Revenue fell short of expectations, however, coming in at $597 million, versus the $602 million estimated by Wall Street.

GameStop — The meme stock added 3.6% ahead of its quarterly results following Wednesday's close. Analysts polled by FactSet are forecasting a quarterly loss of 15 cents per share.

The full list can be found here.

— Hakyung Kim

Warner Bros Discovery shares pop

Shares of Warner Bros Discovery rallied nearly 5% in midday trading after CNN announced CEO Chris Licht was leaving.

CNN, which is owned by Warner Bros Discovery, said Licht was out after a rocky year at the helm that included criticism over the network's town hall with former president Donald Trump. He was also facing a rebellion among the talent and staff.

— Michelle Fox

Regional bank stocks continue their June rebound

The SPDR S&P Regional Bank ETF (KRE) has gained more than 2% on Wednesday and is on track for its fourth positive day in five.

After selling off dramatically earlier this year after some mid-sized banks like Silicon Valley Bank failed, regional bank stocks appear to have stabilized.

PacWest Bancorp was one of the biggest winners of the day, with the stock jumping 15%.

— Jesse Pound

Amazon planning to launch ad tier for Prime streaming service, according to WSJ report

Amazon is planning to create ad-supported subscription tiers for Prime Video, according to a report from the WSJ. The move would come as other competitor streaming services also create ad-supported tiers to generate more revenue for their streaming services.

The company is also in talks with Paramount Global and Warner Bros Discovery to potentially add the ad-based tiers of their streaming services onto Prime Video Channels, per the report.

Amazon shares were down more than 3% Wednesday afternoon.

— Hakyung Kim

Michael Goldstein says A.I. valuations are nowhere nears levels seen during past innovation cycles

The mountain-high valuations seen in the technology sector during this new artificial intelligence wave, don't look so "extreme" when looking at previous innovation waves.

"The relative forward-P/Es of today's AI leadership are still a far cry from what was seen at the peaks of past innovation waves," wrote Empirical Research Partners' Michael Goldstein in a Tuesday note." In fact, they sit close to the level reached a year before the tops."

Read more on Goldstein's research here.

— Samantha Subin

The tech and energy sectors have lifted the S&P 500 closer to 4,300

The S&P 500 is a stone's throw from its last 52-week high of 4,325.28, established on Aug. 16. The tech and energy sectors have been leading the index higher since then. At about noon in New York, the index traded around 4,275.

Since the S&P 500's last 52-week high and close above 4,300, tech has gained 10%, while energy is up 7%. Other notable corners of the market include the iShares US Home Construction ETF (ITB), up more than 26%, and the VanEck Semiconductor ETF (SMH), which has gained 20% since Aug. 16.

Standout performers within the S&P 500 since Aug. 16 include Royal Caribbean, which has added 107% since then, and Nvidia, up about 105%. Netflix, First Solar and PulteGroup have each added more than 60% in that period.

-Darla Mercado, Gina Francolla

Small caps and equal-weighted S&P 500 outperform

The S&P 500 is languishing, but small-cap stocks and an equal-weighted version of the S&P 500 are doing well — signaling the narrow market rally seen on the Street may be broadening out.

The Russell 2000, which tracks small caps, rose more than 1% on the day, adding to its 2.7% surge from Tuesday. The Invesco S&P 500 Equal Weight ETF (RSP), meanwhile, climbed 0.6%.

— Fred Imbert

Investors will likely 'be pleased once again' after next week's Fed meeting, says CFRA Research

With markets expecting the Federal Reserve to announce a rate hike pause during its next meeting June 13–14, CFRA Research's chief investment strategist Sam Stovall says the markets could see a boost.

The CME FedWatch Tool projects a 62.1% probability of the central bank maintaining its current target rate, as of Wednesday afternoon.

"Historically, in the period between FOMC meetings after which the Fed did decide to skip a rate hiking cycle, the market was up 88% of the time 14 of 16 times and the average eight months gain was 3.6%," Stovall said.

"So I think that investors will be pleased once again, if we do end up seeing the Fed, hold off on raising rates again," he added.

— Hakyung Kim

Morgan Stanley calls Match a top pick as online dating demand grows

Morgan Stanley views Match Group as a big beneficiary of continued online dating growth.

"Contrary to bear case concerns centered on US online dating saturation and 'swipe fatigue', our April AlphaWise survey shows demand for online dating increasing (+9 pts since Sept) with continued penetration gains," wrote analyst Lauren Schenk in a Tuesday note, calling the stock a top pick in the space.

Match-owned Tinder already captures 60% of younger, Gen-Z users, and 41% of overall market share, according to the survey. Data also suggests daters plan to up their usage substantially over the next year.

"With positive user traction, but poor investor sentiment, we see opportunity for multiple expansion in the back half," she wrote.

— Samantha Subin

Piper Sandler hikes Amazon price target, says AWS 'trough' is approaching

Piper Sandler expects more upside in store for Amazon as the setup within its retail and AWS units improves.

"AI has become an even greater talking point following the recent NVDA print," wrote analyst Thomas Champion in a Wednesday note to clients. "While there are puts & takes on AWS's AI capabilities, a revenue growth trough seems near."

Given this setup, Champion lifted 2024 estimates for the AWS unit and hiked his price target on Amazon shares to $150, reflecting more than 18% upside from Tuesday's close.

He expects revenue to bottom out during the second half of this year.

— Samantha Subin

Affirm shares jump 19% after Amazon Pay deal

Affirm shares surged 19% during midday trading. The move comes after Amazon and Affirm said Wednesday that Amazon Pay is adding Affirm's flexible payment option to checkout. Affirm allows shoppers to buy now and make payments over time.

Meanwhile, Amazon shares were lower by 1.7%.

— Sarah Min

Regional bank ETFs on pace for four consecutive positive trading days

The S&P Regional Banking ETF (KRE) closed above its 50 day moving average during the last three trading sessions. This marks the first time since late February and early March, or prior to the onset of the regional banking crisis, according to Bespoke Investment Group.

The KRE is trading 2.4% higher Wednesday.

— Hakyung Kim

S&P 500 nears 4,300 mark

The S&P 500 is trading up 0.2% at 4,292.86 as of 10:11 a.m. ET. The broad market index last reached the 4,300 mark on a intraday basis on Aug. 17, 2022, when it hit a high of 4,302.18.

The 52-week high for the S&P 500 is 4,325.28 from Aug. 16, 2022.

— Hakyung Kim, Gina Francolla

Mobileye is a 'leading' self-driving stock, Canaccord Genuity says

Canaccord Genuity Analyst George Gianarikas began coverage of Mobileye Global with a buy rating, and a $50 price target, saying the self-driving technology firm is a leader in its field. The stock was up 1% in Wednesday premarket trading.

"We believe autonomous vehicles (AVs) are set to increase resource utilization, improve productivity, save lives, and much more," Gianarikas wrote Wednesday. "We see vehicle autonomy as one of the highest value-creating technologies to be deployed. Ever."

— Sarah Min

Stocks rise slightly to start the session

The Dow and S&P 500 were up slightly to start the session, while the Nasdaq Composite climbed 0.4%.

— Fred Imbert

JPMorgan hikes Netflix price target

JPMorgan Analyst Doug Anmuth hiked his price target on the streaming giant, saying the streaming giant's password sharing crackdown can drive revenue growth.

"We're updating our NFLX model to capture the broader Paid Sharing opportunity following the rollout in late May to 100+ markets," Anmuth said to clients in a Wednesday note.

Netflix shares popped 3% in Wednesday premarket trading.

— Sarah Min

Buy this Brazilian oil stock on the strength of its dividend potential, Morgan Stanley says

Morgan Stanley analyst Bruno Montanari upgraded this Brazilian energy giant to overweight from equal weight, and hiked his price target, on the strength of its dividend potential.

"[We] see further room for capital appreciation," Montanari wrote. "And the potential total return — 51% after a ~16% dividend yield — looks compelling enough to us to justify a more positive stance on the stock in 2023."

— Sarah Min

Trade deficit jumps in April, but less than expected

The U.S. trade deficit rose sharply in April, though the increase wasn't quite as much as expected.

The goods and services imbalance hit $74.6 billion for the month, $1 billion less than the Dow Jones estimate but a $14 billion increase from March. Exports tumbled by $9.2 billion, while imports rose by $4.8 billion.

Imports are a net negative for GDP, so the April figure could mean lower growth for the second quarter.

—Jeff Cox

Broadcom is a best-in-class chip stock as A.I. drives earnings power, Bank of America says

Bank of America Analyst Vivek Arya reiterated a buy rating on Broadcom after a keynote address from CEO Hock Tan at the firm's global technology conference. The analyst said Broadcom continues to be a "best-in-class" buying opportunity as artificial intelligence drives earnings power.

"Management presented a compelling and unique vision of focus on premium compute/networking products, laserfocus on operational efficiency, consistent GM expansion, and best-in-class FCF generation/returns (FCF margins of 50%+ the highest in semiconductor industry)," Arya wrote in a Wednesday note.

— Sarah Min

Stocks making the biggest moves premarket

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

Stitch Fix — Shares jumped more than 7% after the company's fiscal third-quarter revenue and adjusted EBITDA earnings came above expectations. The company mentioned it focused on "improving efficiencies, maintaining profitability and cash flow" during the third quarter.

GameStop — The meme stock added 2.4% premarket ahead of quarterly results on Wednesday. Analysts polled by FactSet are forecasting a quarterly loss of an adjusted 15 cents per share.

Coinbase — The crypto exchange climbed about 2% in premarket following a 12% selloff the day before. The SEC sued Coinbase on Tuesday, alleging the company was operating as an unregistered exchange and broker. Ark Invest's Cathie Wood bought the dip in Coinbase.

Read the full list here.

— Brian Evans

Cocoa futures hit highest levels in almost 7 years

Cocoa futures (SEP) hit a high of $3,096 per metric tonne. The commodity traded at its highest levels since Aug. 19, 2016 during Tuesday's trading session, when cocoa traded as high as $3,120.

Many experts say climate change is partly responsible with some forecasts showing that the temperature in the Ivory Coast will climb 3.8 degrees by 2050, which will cause soil and plants to dry out. Close to 90% of cacao-growing land in the Ivory Coast and Ghana could be unsuitable for cultivation, according to estimates.

Hershey announced it was raising prices on all of its products in Feb of 2022 due to the rising cost of ingredients.

— Hakyung Kim

Cathie Wood adds more than $20 million of Coinbase shares to her ARK Innovation ETF

Ark Invest's Cathie Wood added to her Coinbase holding Tuesday, unfazed by the Securities and Exchange Commission's charges against the crypto exchange.

Wood snapped up 329,773 shares of Coinbase for her flagship ARK Innovation ETF in the previous session when the stock tumbled more than 12%. She also added 53,885 shares for ARK Next Generation Internet ETF as well as another 35,666 shares for Ark Fintech Innovation ETF. Combined, these purchases were worth more than $21.6 million based on Coinbase's closing price of $51.61.

Coinbase shares gained more than 3% Wednesday during premarket trading.

The full story can be found here.

— Hakyung Kim, Yun Li

Jeffrey Gundlach sees higher chance of recession

DoubleLine Capital CEO Jeffrey Gundlach said Tuesday that it looks increasingly likely the U.S. will tip into a recession.

The noted fixed income investor pointed to the U.S. leading the index of 10 economic indicators from the Conference Board, saying it looks "absolutely full on recessionary."

"It's pretty clear that we have the look of soon to be at the front end of a recession," Gundlach said during a DoubleLine investor webcast, adding indicators including ISM new orders and the purchasing managers' index appeared to be signaling a downturn.

— Yun Li

Some signs of broadening market leadership emerging, trader says

Tom Essaye of The Sevens Report said Tuesday's session showed some signs of broadening market leadership, as the small-cap Russell 2000 index rallied more than 2%.

"The 'baton' is being passed from mega-cap 'AI' names to cyclical sectors," Essaye said in a note to clients. "From a tactical stand-point, that means the next leg of a rally, should it hap-pen, will likely see the following outperform: RSP (equal-weight S&P 500), IWM (Russell 2000 ETF), industrials (XLI), materials (XLB) and, if you're into volatility and like loaded risk/reward, financials (XLF) and energy (XLE)."

The large-cap S&P 500 closed at its highest level since August on Tuesday and is up more than 10% year to date. However, many on Wall Street are concerned that only a few tech-related names are driving that upside.

— Fred Imbert

Treasury yields dip slightly as investors weigh expectations for economy, Fed policy

U.S. Treasury yields fell slightly on Wednesday as investors considered the outlook for the economy and Federal Reserve interest rates ahead of the central bank's next policy meeting on June 13 and 14.

Mixed messages from central bank officials and strong economic data have raised questions among investors about whether the Fed will pause or continue its rate-hiking campaign.

At 4:38 a.m. ET, the yield on the 10-year Treasury was trading over one basis point lower at 3.6832%. The 2-year Treasury yield was down by more than one basis point to 4.5103%.

Japanese stocks tumble, reversing gains from previous sessions

Stocks in Japan tumbled in Wednesday's afternoon, as investors sold off ahead of the fixing of special quotation prices at the end of the week.

The Nikkei sharply fell by more than 1.8% and the Topix fell 1.34% – with the latter seeing declines led by healthcare, industrials, and technology stocks.

Shares of Sony led gains and fell 1.95%, followed by Tokyo Electron, Keyence Corp, and Daikin Industries.

The reverse in gains after Japanese stocks marked a new three decade high in previous sessions. The Japanese yen strengthened 0.2% to 139.36 against the U.S. dollar.

– Jihye Lee

China's exports plunge more than expected

China exports dropped more than expected in May, government data showed.

Exports fell 7.5% year-on-year in U.S. dollar terms, falling further than forecasts of 0.4% in a Reuters poll. Imports meanwhile fell 4.5% year-on-year, slightly above expectations of an 8% drop.

The trade surplus missed expectations and stood at $65.81 billion.

The onshore Chinese yuan weakened and last traded at 7.1190 against the U.S. dollar.

– Jihye Lee

Australia's economy grows by 2.3% in first quarter, slowest growth in 18 months.

Australia' first quarter gross domestic product expanded by 2.3% year-on-year, just slightly below analyst expectations.

This was the slowest rate of growth in 18 months since the country emerged from a Covid-19 lockdown in September 2021.

Economists polled by Reuters forecast an expansion of 2.4%, compared to the 2.7% expansion in the fourth quarter of 2022.

On a quarter on quarter basis, GDP grew by 0.2%, compared to the 0.3% expected in the Reuters poll.

— Lim Hui Jie

European equity markets open mixed

European stocks opened mixed Wednesday, but sentiment generally remains subdued and markets lack direction.

The pan-European Stoxx index was up 0.1% at market open before quickly dropping into negative territory, with sectors a mix of minor gains and losses. Banking stocks had a marginal uptick of 0.5%, followed by retail, which was up 0.4%. Health-care stocks, chemicals and telecom each dropped 0.4%.

— Hannah Ward-Glenton

Stitch Fix gains on smaller-than-expected loss

Stitch Fix's stock added more than 4% in extended trading after reporting better-than-expected results for the recent quarter, including a smaller-than-expected loss.

The online clothing and styling company with a market capitalization totaling roughly $414 million, posted a loss of 19 cents per share on $395 million in revenue. Analysts polled by Refinitiv had expected a 30-cent loss per share on revenues totaling $389 million.

Stitch Fix said it will explore exiting the U.K. market in the 2024 fiscal year.

— Samantha Subin

Dave & Buster's rises on earnings

Dave & Buster's stock rose nearly 4% in extended trading after the entertainment company posted first-quarter revenue that topped Wall Street's expectations.

The company reported earnings of $1.45 a share. That came in 21 cents above the $1.24 expected by analysts, according to Refinitiv. Dave & Buster's reported $597 million in revenue for period, slightly below the expected $602 million.

— Samantha Subin

Stocks open flat

Stocks opened flat on Tuesday evening.

Futures tied to the Dow Jones Industrial Average inched 14 points higher. S&P 500 futures and Nasdaq-100 futures traded flat.

— Samantha Subin