US stocks were slightly lower on Wednesday, with technology stocks falling, but gains in meta platforms provided some support with comments from Federal Reserve Chairman Kevin Warsh that inflationary risks have eased recently. Warsh also said he would firmly stick to the US central bank’s 2% inflation target, “disappointing” anyone expecting looser monetary policy despite President Donald Trump’s calls to cut interest rates.

Oil prices rose sharply at the start of the Iran war. Traders lowered their rate-hike expectations slightly, but they still expect at least one hike from the US central bank this year, according to data compiled by LSEG. Shares of Meta Platforms rose after Bloomberg News reported that it is building a cloud business to sell additional AI computing capacity.

“This looks like something that is likely to continue to help stocks,” said Tim Gresky, senior portfolio strategist at Ingalls & Snyder in New York. “It has underperformed the Mag 7 group of other megacap stocks.” Meta shares remain down for the year to date.

Semiconductors index was off sharply.

Investors are closely watching the talks between the US and Iran and remain cautious, especially over the long US holiday weekend, Grisky said.

According to preliminary data, the S&P 500 fell 14.34 points, or 0.19%, to close at 7,485.02, while the Nasdaq Composite lost 169.56 points, or 0.65%, to 26,044.16. The Dow Jones Industrial Average was down 3.62 points, or 0.01%, at 52,315.58.

The main monthly US jobs report is out on Thursday, while markets are closed on Friday before the Fourth of July holiday. US Vice President JD Vance said talks between the US and Iran were going well as they held indirect technical talks about the Strait of Hormuz in Qatar on Wednesday, adding that Washington would not return to full-scale combat unless necessary. The US and Iran signed an interim agreement last month. Investors are also digesting data from the Institute for Supply Management that showed US manufacturing activity slowed in June but was still solid.

The day’s disappointing performance comes after a strong second quarter for the index. The S&P 500 and Nasdaq Composite posted their biggest quarterly gains since 2020, while the Dow posted its best performance since 2022.

Amid the day’s decline, Alcoa shares fell after Australia’s South32 agreed to sell most of its aluminum assets to Alcoa.