By Stephen Culp
NEW YORK (Reuters) -Wall Street ended lower and oil prices fell on Wednesday as investors parsed minutes from the U.S. Federal Reserve's most recent policy meeting.
Nvidia Corp's shares rose over 4% in extended trading after the megacap chipmaker forecast quarterly revenue above estimates.
All three major U.S. stock indexes turned decisively lower in afternoon trading, extending losses after the Fed released its minutes showing officials were disappointed in recent inflation data and believed "disinflation would likely take longer than previously thought."
"'Higher for longer' is the spark for today's pressure on the markets," said Greg Bassuk, CEO at AXS Investments in New York. "The Fed confirmed its worries that it hasn't seen more progress in inflation."
"And that, combined with the investor worries of an over inflated market is fueling the jitters on Wall Street," Bassuk added.
Mixed quarterly results from retailers Target (NYSE:TGT) and TJX (NYSE:TJX) raised questions about the resiliency of the U.S. consumer.
Nvidia's upcoming quarterly report could further test the U.S. stocks rally, largely driven by the promise of artificial intelligence technology.
Investor sentiment was growing "that Nvidia, the chip sector generally, and the overall market have advanced too high too fast," Bassuk said. "We think the hype around Nvidia is overblown and we think investors would be prudent to look at the stock with a more cautious eye today."
Economic data showed U.S. existing home sales were below analyst estimates, while hotter-than-expected core inflation data from Britain prompted investors to shave bets on a Bank of England rate cut next month.
British Prime Minister Rishi Sunak called an election for July 4. His governing Conservatives are widely expected to lose to the Labour Party.
"Clearly Sunak is hoping that the element of surprise will go in his favour ... but I don't think markets are going to be particularly moved by this," said Jane Foley, head of FX strategy at Rabobank in London. "It doesn't change the fact that the Labour Party is 20 points ahead in the polls."
The Dow Jones Industrial Average fell 201.95 points, or 0.51%, to 39,671.04, the S&P 500 lost 14.4 points, or 0.27%, to 5,307.01 and the Nasdaq Composite dropped 31.08 points, or 0.18%, to 16,801.54.
European shares pulled back on the stronger-than-expected British inflation data following a report about possible Chinese tariffs on imported cars.
The pan-European STOXX 600 index lost 0.34% and MSCI's gauge of stocks across the globe shed 0.39%.
Emerging market stocks rose 0.12%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.31% higher, while Japan's Nikkei lost 0.85%.
Yields for 10-year Treasury notes edged up from session lows after the release of the Fed minutes.
Benchmark 10-year notes last fell 4/32 in price to yield 4.4276%, from 4.414% late on Tuesday.
The 30-year bond rose 5/32 in price to yield 4.5443%, from 4.554% late on Tuesday.
The dollar advanced against a basket of world currencies.
The dollar index rose 0.26%, with the euro down 0.29% to $1.0823.
The Japanese yen weakened 0.39% to 156.78 per dollar, while sterling was last trading at $1.2713, up 0.05% on the day.
Crude prices dropped for the third consecutive session on fears that demand would be hit by prolonged restrictive Fed policy.
U.S. crude slid 1.39% to settle at $77.57 per barrel, while Brent settled at $81.90 per barrel, down 1.18% on the day.
Gold prices plunged, backing down from recent record highs.
Spot gold dropped 1.8% to $2,379.22 an ounce.