The U.S. stock market pared its earlier losses on Wednesday as investors assessed the latest economic data and remarks from Federal Reserve Chair Kevin Warsh.

The S&P 500 index closed down 0.2% in New York, while the technology-heavy Nasdaq 100 index fell 1.5%.

Although most components of the S&P 500 rose, declines in semiconductor shares weighed on the broader market.

Sectors sensitive to the economy outperformed after data showed U.S. manufacturing activity expanded for a sixth consecutive month in June, with a surge in input costs due to war pressures easing somewhat.

Raymond James Chief Economist Eugenio Aleman stated, "Overall, this report shows that manufacturing remains resilient and also supports our view that the U.S. economy is re-accelerating, with growth this year still expected to reach around 2.4%."

Investor attention may now shift to a series of employment data scheduled for release on Thursday.

Barclays Private Bank & Wealth Management Chief Market Strategist Julien Lafargue noted that with Warsh currently focused on inflation, the June non-farm payrolls data "by itself is unlikely to change interest rate expectations." Additionally, hiring related to the World Cup could also distort the figures.

Speaking in Sintra, Portugal on Wednesday, Warsh said inflation risks have eased in recent weeks and reiterated the commitment to bringing inflation back down to the 2% target.

AJ Bell Investment Director Dan Coatsworth commented, "Warsh seems determined to avoid making persistent comments on the direction of interest rates, but investors are still trying to find any clues from his remarks."

Regarding the Iran situation, according to a senior government official, U.S. negotiators held positive talks in Qatar, and technical consultations with Iran are also advancing.

Shares of Meta Platforms, Inc. rose 8.8% following a report that the Facebook parent company is formulating plans for a cloud infrastructure business.

At the close, the S&P 500 index was down 0.2% at 7,483.23 points.

The Dow Jones Industrial Average was essentially flat at 52,305.24 points.

The Nasdaq Composite Index fell 0.7% to 26,040.03 points.

The Nasdaq 100 index declined 1.5% to 29,809.13 points.

The Russell 2000 index dropped 0.4% to 3,012.59 points.