Wall Street closed lower after a choppy session on Wednesday, dragged down by energy stocks. Earlier in the day, Fed Chairman Jerome Powell’s statement in the Senate Committee meeting had a positive impact on the markets, but as the day progressed, looming fears of a recession made the markets give up the early gains. All three major stock indexes ended in the red. How Did The Benchmarks Perform? The Dow Jones Industrial Average (DJI) lost 0.2% or 47.12 points to close at 30,483.13. Fifteen components of the 30-stock index ended in the red, one remained unchanged, while 14 ended in the green. The tech-heavy Nasdaq Composite finished at 11,053.08, dipping 0.2% or 16.22 points. The S&P 500 fell 0.1% or 4.9 points to close at 3,759.89. Seven of the 11 broad sectors of the benchmark index closed in the red. The Energy Select Sector SPDR (XLE), the Materials Select Sector SPDR (XLB) and the Industrials Select Sector SPDR (XLI) fell 4%, 1.3% and 0.6%, respectively, while the Real Estate Select Sector SPDR (XLRE) advanced 1.6%. The fear-gauge CBOE Volatility Index (VIX) declined 4.1% to 28.95. A total of 12.2 billion shares were traded Wednesday, lower than the last 20-session average of 12.5 billion. Decliners outnumbered advancers on the NYSE by a 1.17-to-1 ratio. On the Nasdaq, a 1.08-to-1 ratio favored the declining issues. Powell’s Statement Sends Mixed Signals Fed chair Jerome Powell said in a hearing of the Senate Banking Committee on Wednesday that the Fed is not trying to engineer a recession to stop inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn. Pre-markets had opened in the red, but Wall Street staged a comeback early in the session as Powell’s comments were seen as a reassurance from the apex bank that it would be overseeing a soft landing of the economy and preventing it from going into recession. Powell’s statement, however, also had a caveat, that recession was certainly a possibility. And with inflation being caused by global incidents beyond the Fed’s control, they would be looking for compelling evidence before easing up on interest rate hikes. As the day progressed and Powell’s statement was interpreted in its entirety, investors resorted back to selling as they could not rule out the possibility of a major economic slowdown. The reality of 100 basis point hikes being in the cards also shaped investor mood, and markets gave up gains logged early in the session. Choppy sessions have been frequent as investors strive to find some comfort in the Fed’s outlook toward tackling inflation with an extremely tight monetary policy. As markets remain volatile, investors keep monitoring every bit of information coming out from the Fed with keen interest. Energy Stocks Drag Markets Down Oil prices fell around 3% on Wednesday on concerns that rate hikes by the Fed could push the U.S. economy into recession, reducing fuel demand. Brent crude fell 2.5% to settle at $111.74/barrel. It hit a session low of $107.03, its lowest since May 19. WTI crude fell 3% to settle at $106.19/barrel, with a session low of $101.53, its lowest since May 11. The Energy sector fell around 4%, returning to its last-week levels, erasing the gains it had made earlier in the week. They were the biggest drag on Wall Street on Wednesday. President Joe Biden, on Wednesday, voiced his plans for a three-month suspension of the federal gasoline tax to combat record prices. He also requested states to temporarily suspend state fuel taxes, which are often higher than federal rates. Consequently, shares of ConocoPhillips ( COP Quick Quote COP - Free Report) and Chevron Corporation ( CVX Quick Quote CVX - Free Report) fell 6.3% and 4.4%, respectively. ConocoPhillips currently carries a Zacks Rank #3 (Hold). You can see . the complete list of today's Zacks #1 Rank (Strong Buy) stocks here Economic Data No economic data was released on Wednesday.