People pass by the Salesforce Tower and offices in New York City, U.S., March 7, 2019.
People pass by the Salesforce Tower and offices in New York City, U.S., March 7, 2019. Reuters / BRENDAN MCDERMID

U.S. stocks were in the red on Wednesday as investors bet that the latest economic data would do nothing to push the Federal Reserve off track from its aggressive interest rate hiking cycle aimed at taming run-away inflation.

Ten of the 11 major S&P sectors declined, with healthcare stocks down 1.0%, consumer staples down 1.3%1.0 and financial down 1.0%. Energy stocks gained 2.1% as Brent Crude rose to $117 a barrel. [O/R]

Data showed that while U.S. job openings fell in April, they remained at high levels, suggesting a continuation of wage increases as companies scramble for workers, which would contribute to inflation staying uncomfortably high.

Also U.S. manufacturing activity picked up pace faster than expected in May as demand for goods remains strong, easing concerns about an imminent recession.

Investors viewed the data mostly through the prism of what it might mean for interest rates, said Mark Luschini, chief investment strategist, Janney Montgomery Scott.

"There wasn't any information to be found in today's releases that's likely to lead the Federal Reserve to become any less aggressive or to tone down its hawkishness in its rate hike campaign," said Luschini.

San Francisco Fed President Mary Daly also said she sees half-point interest rate hikes in the next couple of meetings as the central bank battles high inflation, lifting rates to 2.5% as quickly as possible. This was in line with comments from Fed Governor Christopher Waller on Monday.

Jamie Dimon, chief executive of JPMorgan Chase & Co, described the challenges facing the U.S. economy akin to an "hurricane" down the road and urged the Fed to take forceful measures to avoid tipping the world's biggest economy into a recession.

By 2:32 p.m. ET (1832 GMT), the Dow Jones Industrial Average fell 81.35 points, or 0.25%, to 32,908.77, the S&P 500 lost 11.27 points, or 0.27%, to 4,120.88 and the Nasdaq Composite dropped 13.47 points, or 0.11%, to 12,067.92.

Uncertainty about the Fed's policy move, the war in Ukraine, prolonged supply chain snarls due to COVID-19 lockdowns in China and higher Treasury yields have rocked stock markets, with the benchmark S&P 500 index falling 14.3% year-to-date.

And until the market has more clarity on inflation and the consumer's ability to keep absorbing higher prices as well as resulting Fed actions, Luschini says stocks may trade sideways.

"There's nothing imminent, that seems likely to catalyze shedding all the worries that have driven the market down to the levels that we're at right now," he said.

The Fed on Wednesday will also begin trimming its $9 trillion balance sheet, amassed as it sought to support the economy amid the COVID-19 pandemic.

The benchmark U.S. 10-year Treasury yield climbed to 2.92%, its highest in two weeks. [US/]

Salesforce jumped 11.1% after the enterprise software firm raised its full-year adjusted profit outlook and said it did not see any material impact from the uncertain broader economic environment.

Victoria's Secret climbed 9.5% after the lingerie brand topped first-quarter profit estimates as costs fell.

Declining issues outnumbered advancing ones on the NYSE by a 1.59-to-1 ratio; on Nasdaq, a 1.79-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week highs and 29 new lows; the Nasdaq Composite recorded 23 new highs and 112 new lows.