Stocks fall as investors weigh rising yields, economic growth concerns

Stocks fell on Wednesday, reversing gains from earlier in the week, as investors kept an eye on the bond market and signs of an economic slowdown.

The Dow Jones Industrial Average shed 227 points, or 0.7%. The S&P 500 and Nasdaq Composite dropped 0.6% and 0.4%, respectively.

The moves came as investors weighed updates from major companies and signs that economic growth may be slowing.

Overseas, Credit Suisse issued a profit warning for the second quarter, citing tighter monetary policy and the war in Ukraine. Target, which issued its own warning on Tuesday, was under pressure again on Wednesday after being downgraded to neutral from buy by Bank of America.

Meanwhile, the Atlanta Federal Reserve's GDPNow tracker now shows a growth rate of just 0.9% for the second quarter, down from 1.3% last week. Mortgage demand hit its lowest level in 22 years last week, according to the Mortgage Bankers Association.

As the Federal Reserve continues to tighten monetary conditions, the concerns about economic growth and corporate earnings could have a bigger impact on stocks, Allianz chief economic advisor Mohamed El-Erian said on "Squawk Box."

"The markets have been taking this news much better than they would have otherwise, but if I were fully invested right now, I'd take some chips off the table. I would wait for more value to be created," El-Erian said.

Action in the bond market may have hurt investor sentiment on Tuesday, as the 10-year Treasury yield jumped back above 3%.

Semiconductor stocks struggled on Wednesday, with Intel falling more than 4% and Marvell Technology dropping 2%.

On the earnings front, shares of Ollie's Bargain Outlet Holdings fell more than 1% in early trading after the discount retailer missed estimates for its first quarter. Campbell Soup, however, moved higher by about 3% after a stronger-than-expected quarterly report.

Investors are looking toward Friday's consumer price index reading for May. Many believe the print will be crucial for the path of Fed policy and whether the central bank will keep raising rates in half-point increments.

The stock market has had a roller-coaster year as the Fed's aggressive rate hikes stoked recession fears. The S&P 500 is off nearly 14% from its all-time high reached in January. The equity benchmark briefly dipped into bear market territory on an intraday basis last month.

"The question is whether this slower implied pace of tightening is attributable to the belief that the Fed will meet its policy goals or because the economy will be tipping into recession," said Gargi Chaudhuri, head of iShares investment strategy at BlackRock. "We believe the US will avoid a recession."

On Tuesday, investors shrugged off some signs of an economic slowdown ahead of a key inflation reading. The S&P 500 gained nearly 1%, rising for a second straight day. The 30-stock Dow advanced more than 260 points, Tuesday, while the tech-heavy Nasdaq Composite rose 0.9%.