By Riva Gold and Alex Bitter Updated June 22, 2016 6:01 p.m. ET
U.S. stocks snapped a two-day winning streak Wednesday as oil prices fell and investors braced for the U.K.s coming vote on membership in the European Union.
Stocks, bonds and currencies around the world have recently moved on expectations around Thursdays U.K. referendum, with risky assets such as stocks and oil gaining when polls and betting firms suggest a victory for the Remain camp, but falling when the odds appear to favor the Leave campaign.
While betting markets pointed to a victory for the Remain campaign, the latest opinion polls have sent conflicting signals. A poll by Opinium released Wednesday showed the two camps neck-and-neck, with Leave at 45% and Remain at 44%.
Players on both sides of the Atlantic continue to hedge going into the Brexit vote, said Tom Carter, managing director at JonesTrading.
The Dow Jones Industrial Average slipped 48.90 points, or 0.3%, to 17780.83. The S&P 500 fell 3.45 points, or 0.2%, to 2085.45, and the Nasdaq Composite Index lost 10.44 points, or 0.2%, to 4833.32.
Energy stocks led the declines, falling 0.6% in the S&P 500. U.S. crude oil for August delivery fell 1.4% to $49.13 a barrel after inventory data showed that U.S. crude supplies dropped less than expected last week.
Oil prices have rallied in recent months, revisiting $50 a barrel on production outages and expectations of declining supplies.
Regardless of the outcome of the U.K. vote, it will be tough for oil to stay above $50, said JJ Kinahan, chief market strategist at TD Ameritrade, given that prices at that level could spur more production.
Marathon Oil MRO 2.20 % fell 34 cents, or 2.3%, to $14.75, and Chesapeake Energy CHK 2.00 % lost 11 cents, or 2.4%, to 4.51.
Health-care stocks gained. Biotech firm Celgene CELG 1.18 % rose 2.37, or 2.4%, to 99.23, while Regeneron Pharmaceuticals REGN 1.63 % added 6.78, or 2%, to 351.92.
Shares of Tesla Motors TSLA -0.22 % fell 22.95, or 10%, to 196.66 after Elon Musk on Tuesday proposed combining the company with solar-energy firm SolarCity, SCTY -1.46 % of which he is also chairman and the largest shareholder. SolarCity jumped 69 cents, or 3.3%, to 21.88.
The Stoxx Europe 600 rose 0.4% for its largest four-session gain since February. Londons FTSE 100 gained 0.6%, but investors remained on edge ahead of the referendum. Clients are more nervous than they were before, said Michelle McGrade, chief investment officer at brokerage TD Direct Investing in London. Its sitting on your hands, waiting and seeing, ahead of the U.K. vote, she said.
Following a recent recovery in stock markets, strategists at UBS on Wednesday said U.K. and European equities could see a short-term percentage decline in the midteens on a U.K. vote to leave the EU, but materially smaller moves for the S&P 500 and emerging-market equities.
There is bigger downside in case of a Leave than there is upside in case of a Remain, said Manu Vandenbulck, senior portfolio manager at NN Investment Partners in Belgium. Still, he said, longer-term losses for Europe may be limited, as the European Central Bank remains supportive, while equity valuations in the region are attractive and investors are sitting on a large amount of cash.
Gold, which tends to gain in times of market stress, pulled back 0.2% to $1,268 an ounce.
The euro edged up 0.5% against the dollar to $1.1297, while the British pound rose 0.4% against the dollar to $1.4706.
Earlier, Asian markets were mixed in light trading, with Japans Nikkei Stock Average falling 0.6% and the Shanghai Composite Index adding 0.9%.
Write to Riva Gold at firstname.lastname@example.org