The S&P 500 index and the Dow fell from record highs pulled down by cyclicals and small caps who drove the rally earlier in the week.

The S&P 500 index closed lower on Wednesday as rising layoffs in the US as a result of new mandatory lockdowns to contain rising COVID-19 infections dampened investor risk appetite.

The index and the Dow Jones Industrial Average retreated from record highs pulled by cyclicals and small caps who drove the rally earlier in the week.

Pandemic-resilient technology and technology-adjacent market leaders helped keep the Nasdaq afloat.

“It’s a day of growth that is deviating from value,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “It’s this ongoing battle between the virus and the vaccine.”

“There is a reality where the vaccine is being spread fairly quickly, but the virus is not going away quickly and therefore the schedule for economic improvement is being postponed.”

A wide range of data released ahead of Thursday’s Thanksgiving Day was dominated by a second straight week of unexpected jobless claims, suggesting that new restrictions to combat coronavirus cases could hinder labor market recovery.

“The economic data is not good and we know that in the face of this new virus wave, it will not be good for some time,” added Ghriskey.

The market appeared to be repeating itself over the past two weeks, starting with rallies fueled by promising vaccine news but refocused on the near-term pandemic realities and the lack of new fiscal stimulus measures.

Still, vaccine developments and the removal of uncertainties surrounding the US presidential election have pushed Wall Street indices to record highs, putting the S&P 500 on the best November ever.

Market participants believe that US stocks have more room to climb. A recent survey by Reuters news agency found that analysts expect the S&P 500 to gain 9 percent by the end of 2021. The index has risen 66 percent since the coronavirus-triggered crash in March and is up 12 percent this year.

The Dow Jones Industrial Average fell 173.77 points, or 0.58 percent, to 29,872.47; the S&P 500 lost 5.76 points, or 0.16 percent, to 3,629.65; and the Nasdaq Composite Index rose 57.08 points, or 0.47 percent, to 12,094.40.

Of the 11 major sectors of the S&P 500, seven ended the session in the red, with energy suffering the largest percentage loss.

The economically sensitive banking sector lost ground and the S&P 500 Banks Index lost 0.7 percent.

Tesla Inc, which had a market capitalization of over $ 500 billion on Tuesday, increased profits 3.4 percent even after the electric automaker recalled around 9,500 vehicles.

The company also plans to start manufacturing electric vehicle chargers in China next year. This is evident from the documents it submitted to the Shanghai authorities.

Declining issues exceeded the number of advanced traders on the New York Stock Exchange by a ratio of 1.24 to 1. On Nasdaq, a ratio of 1.01 to 1 favored declines.

The S&P 500 posted 15 new 52-week highs and no new lows. The Nasdaq made 120 new highs and eight new lows.

The volume on the US stock exchanges was 10.76 billion shares, compared with the average of 11.17 billion in the last 20 trading days.

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