The S&P 500 ended lower on Wednesday, pulled down by declines in JPMorgan, Blackstone and other financials, while Nvidia and Alphabet lifted the Nasdaq as investors shifted toward AI-related stocks.

Drops in the S&P 500 and Dow Jones Industrial Average followed intraday record highs earlier in the session. Shares of housing acquisition companies tumbled after US President Donald Trump said he was moving to ban Wall Street investors from buying single-family homes, in a bid to reduce home prices.

Blackstone and Apollo Global Management dropped more than 5 percent, contributing to a 1.4 percent decline in the S&P 500 financials index. American Homes 4 Rent fell 4.3 percent.

Real estate platform Zillow moved over 2 percent higher.

JPMorgan Chase fell 2.3 percent after Wolfe Research downgraded the bank to "peer perform" from "outperform."

Northrop Grumman slid 5.5 percent and Lockheed Martin lost 4.8 percent after Trump said he would not permit dividends or stock buybacks for defence companies ⁠until they fix problems with the production of military equipment. In his social media post, Trump did not mention specific companies.

Nvidia and Microsoft rose about 1 percent each, and Alphabet rose more than 2 percent as investors shifted back into AI stocks following recent worries they were overvalued.

Underscoring investor appetite for heavyweight AI players, Anthropic is planning a multibillion-dollar fundraise that would value the Claude chatbot maker at US$350 billion.

That would make the privately held company more valuable than the vast majority of corporations, including Advanced Micro Devices, Chevron and Wells Fargo.

"Investors have come into 2026 with a similar playbook to last year: Buy tech and forget about it. Rumours that the AI trade was done turned out not to be true," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

The S&P 500 declined 0.3 percent to end the session at 6,920 points.

The Nasdaq gained 0.2 percent to 23,584, while the Dow Jones Industrial Average declined 0.9 percent to 48,996 points.

Data on Wednesday showed US job openings fell more than expected in November after rising marginally in October, while a separate ADP ⁠report showed that private payrolls increased less than expected in December.

While the latest labour market datasets mark a return to the standard release of economic data disrupted by the US government shutdown, they did little to change expectations of interest rate cuts from the Federal Reserve ahead of Friday's key government payrolls report. (Reuters)