Stocks fall to lows of the session, Nasdaq down more than 1%

U.S. stocks moved slightly lower on Wednesday after rallying in the previous session as investors monitored developments in Ukraine and the bond market.

The S&P 500 fell 0.8%, and Nasdaq Composite lost 1.2%. The Dow Jones Industrial Averaged dipped 155 points, or 0.5%.

Russia said Tuesday it would reduce its military presence in some parts of Ukraine, but several countries — including the U.S. and U.K. — remain skeptical over Moscow's pledge. Meanwhile, Russian attacks on Ukraine continued Wednesday.

Crude prices, which have soared since the war began, climbed more than 3% to top $107 per barrel on Wednesday. Germany warned of potential rationing of natural gas due to disputes with Russia, and U.S. crude stockpiles fell.

Oil stocks moved higher, with Valero rising more than 4% and Phillips 66 gaining about 3%.

Liz Ann Sonders, chief investment strategist at Charles Schwab, said the higher oil prices could be a bearish signal for the overall market even while it boosts energy stocks.

"We're already seeing signs of what I call a countercyclical inflation environment, sometimes called a cost-push inflation environment, where inflation gets so high that it starts putting pressure" on growth, Sonders said.

Semiconductor stocks were a weak spot for the market, with Marvell Technology falling 3% and Nvidia shedding more than 2%. Micron was flat despite a stronger-than-expected earnings report.

Several retail stocks were under pressure on Wednesday after disappointing quarterly reports, including Five Below and Chewy. RH fell 12% after the company's fourth-quarter revenue came in short of expectations. On the positive side, apparel stock Lululemon jumped 5% after issuing upbeat guidance and announcing a share buyback program.

Elsewhere, shares of Apple, which have risen for 11 consecutive sessions, were down less than 1%. Shares of Procter & Gamble dipped 1.3% following a downgrade from JPMorgan.

Wall Street is coming off strong two week stretch, with the S&P 500 up roughly 10% since mid-March.

However, many investment professionals are reluctant to call for the all-clear on a market rebound.

"Above 4,600 in the S&P 500, markets have now traded through most fundamental bounds of valuation, and for this rally to continue, we'll need to see real, actual positive events (not just events that aren't as bad as feared)," Tom Essaye of the Sevens Report said in a note to clients Wednesday.

Investors also kept an eye on the bond market as the U.S. 5-year and 30-year Treasury yields inverted Monday for the first time since 2016. Historically, this inversion has been a sign of a coming recession, though it hasn't been a good indicator of when the recession would come. Still, investors largely shrugged off the event.

On Tuesday, the main yield spread traders watch, that between the 2-year and the 10-year rate, came close to inverting but stayed positive. On Wednesday, the spread held near 2 basis points.

"The big talk right now is that at any given point in time, recession can be on the horizon," Stephanie Lang, chief investment officer at Homrich Berg, told CNBC. "Typically, you won't see a recession for an average of 20 months once a yield curve inverts. Our antennas are up that recession risk is heightened; that doesn't necessarily mean that there'll be one this year, though next year is more of a concern for us."

Wednesday was also a busy day of economic data. The ADP payrolls report said private firms added 455,000 jobs in March. Economists surveyed by Dow Jones were expected 450,000. The final reading for fourth quarter U.S. GDP showed 6.9% growth, below the preliminary reading of 7%.