The S&P 500 and the Nasdaq Composite fell for a second straight session in a lackluster start to September.

The S&P 500 lost 0.16% to finish at 5,520.07, while the Nasdaq Composite slipped 0.3% to close at 17,084.30. The Dow Jones Industrial Average was the outlier, edging up 38.04 points, or 0.09%, to end at 40,974.97.

"At least on the margins, you're seeing some nibbling after that sell off yesterday," said Truist's co-chief investment officer Keith Lerner. "Investors are a bit on edge; it's a low-conviction trade. Everyone's waiting for this Friday employment report, and until then, we're in a bit of a holding pattern."

Nvidia fell 1.7% following a Bloomberg report that the U.S. Justice Department sent subpoenas to the chipmaker. The move comes after Nvidia tumbled more than 9% Tuesday amid a broader pullback in semiconductors.

Some megacap technology and chip stocks regained their footing Wednesday, with Advanced Micro Devices and Tesla rallying about 3% and 4%, respectively. Meta Platforms, Marvell Technology, Broadcom and Qualcomm edged higher.

Stocks bounced off their lows as the so-called yield curve of the Treasury market momentarily returned to a normal state. The curve had been inverted with the rate on the 10-year note lower than the 2-year yield. This is a common recession signal and had worried investors. On Wednesday, the 10-year yield returned to even with the 2-year yield at one point and briefly went slightly higher.

Wall Street is coming off a losing session, with the major benchmarks posting their worst day going back to the sell-off Aug. 5, as chip names struggled and the latest economic data implied slowing growth for the U.S. economy.

Traders are bracing for more volatility in September, with many anticipating a pullback of 5% or more in this historically weak stretch for equities. Pullbacks such as those experienced in recent weeks, however, should not dissuade investors, according to TD Wealth's chief investment strategist Sid Vaidya.

"From our standpoint, this is normal course, short-term volatility," he said. "We wouldn't change any positioning based on the last day and a half."