Stocks reversed some gains after a sharp two-day rally on Wall Street, and the Dow fell 400 points

US stocks fell on Wednesday, giving up some of their sharp gains from the past two sessions as Treasury yields rose.

The Dow Jones Industrial Average was down 417 points, or 1.4%. The S&P 500 and Nasdaq Composite were down 1.7% and 2.3%, respectively.

Treasury returns refreshed WednesdayStocks are overburdened. The 10-year rate was trading 10 basis points higher at 3.713% after briefly dropping below 3.6% in the previous session.

In its latest report, the ADP said private payrolls increased by 208,000, topping Dow Jones estimates. Traders are still looking forward to Friday’s non-farm payrolls report.

“Five of the last bear markets since 1950 ended in October,” Sam Stovall, chief investment analyst at CFRA, told CNBC’s “Squawk on the Street.” However, he added, “I still think we have ways to go. We’re down 25% but bear markets with slacks typically drop about 35% over a 15-month period. And while we have these comfortable highs, we’re likely to continue bearish maybe until first quarter of next year.

On Tuesday, the Dow jumped 825 points, or 2.8%. The S&P 500 rose about 3.1%, while the Nasdaq Composite advanced 3.3%. These gains, which came on the back of lower bond yields, led to the strongest two-day extension for the S&P 500 since 2020.

Market participants wondered if these signs could mean that markets have finally settled on the bottom after sharp declines in the previous quarter.

“I don’t think you should worry about a recession until the second half of ’23,” Barry Bannister, chief equity strategist at Stifel, said Tuesday on CNBC’s “Closing Bell: Overtime.” “So there is room for a gathering as we enter the first part of next year.”