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S&P down as Fed minutes fail to halt losing run

The S&P 500 has extended its losing streak to four sessions as Wall Street ended broadly lower, with investors cautious despite the latest guidance on rate policy from the United States central bank showing few surprises.

Minutes from the Federal Reserve's January 31-February 1 meeting said "almost all" Fed officials agreed to slow the pace of increases in interest rates to a quarter of a percentage point.

There was also solid backing though for the belief that the risks of high inflation remained a "key factor" that would shape monetary policy and further rate hikes would be necessary until it was controlled.

Such messaging carried few surprises versus what the Fed and its governors have been communicating in recent weeks, and stocks were broadly steady in the wake of the minutes' release after choppy trading prior to their publication.

However, a general weakening in the final hour of trading pushed both the S&P 500 and the Dow Jones Industrial back into the red.

The Nasdaq Composite managed to scrape back into positive territory though in the final moments, ensuring its own losing streak was snapped at three.

"It's clear that the Fed is determined to keep on with its rate-hiking campaign, and they are going to do it even as recession risks grow," said Ed Moya, senior market analyst at OANDA.

"And that's why, after digesting the minutes, you saw markets softening a little bit."

The S&P is now on its longest negative run since mid-December.

It finished below 4000 points for the second straight day on Wednesday - a level not recorded since January 20.

The Dow fell 84.5 points, or 0.26 per cent, to 33,045.09, the S&P lost 6.29 points, or 0.16 per cent, to 3,991.05 and the Nasdaq added 14.77 points, or 0.13 per cent, to 11,507.07.

Despite the declines experienced by the S&P and the Dow, the falls were not as sharp as Tuesday's, which was the worst daily performance posted by markets in 2023.

Following a market rout in 2022, the three major indexes logged monthly gains in January as investors hoped the Fed would pause its rate hikes and perhaps pivot around year-end.

However, stocks have had a volatile run in February, as traders priced in higher interest rates for longer, assuming that inflation remains higher in a sturdy economy.

Money market participants expect rates to peak at 5.35 per cent by July and stay about those levels until the end of 2023.

"We'll see what happens with equities but I think downward momentum should lead over the next couple of weeks," OANDA's Moya said.

Most of the 11 major S&P 500 sectors fell, with energy and real estate the poorest performers.

The duo declined 0.8 per cent and 1.0 per cent, respectively.

The energy index has finished lower for seven straight sessions, as commodity prices have come under pressure from investor concerns over future economic growth and fuel demand.

Meanwhile, CoStar Group Inc fell 5.1 per cent after the online real estate marketplaces provider said it was no longer in talks to buy owner Move Inc from News Corp - which, itself, closed 3.2 per cent lower.

Volume on US exchanges was 10.58 billion shares, compared with the 11.61 billion average for the full session over the past 20 trading days.

The S&P 500 posted four new 52-week highs and one new low; the Nasdaq Composite recorded 36 new highs and 110 new lows.