The S&P 500 and Dow Jones Industrial Average were weighed down by lower energy shares as oil prices fell on Wednesday and added to concerns over low inflation, while healthcare and technology stocks helped lift the Nasdaq Composite index.

Energy was the weakest S&P sector with a 1.6 percent decline after oil prices reversed course during the morning session and domestic crude reached its lowest level since August, despite larger-than-expected declines in inventories. Continued weakness in oil futures added to investor worries over inflation.

The S&P bank stock index fell 0.8 percent over concerns that interest rate margins would be hurt by a flattening yield curve, which is also driven by inflation expectations.

The industrial sector index was also among the day’s worst hit indexes with a 0.7 percent drop. Caterpillar’s 3.3 percent share price drop weighed on the sector while a 1.6 percent rise in FedEx gave the index its largest positive push.

Investors looking for growth opportunities turned to the Nasdaq, which contains many technology and biotechnology companies. Healthcare stocks were helped by reports that President Trump’s efforts to rein in drug prices may be friendlier than expected.

The energy index has fallen 14.9 percent so far this year compared with an 8.9 percent rise for the S&P 500. Oil futures have fallen about 21 percent so far, this year. The four-company telecommunications sector was the second weakest with a 1.2 percent drop, with AT&T leading the percentage declines.

The Nasdaq biotechnology index was up 4.1 percent, on track for its larggest one-day gain since the day after Trump’s Nov. 8 election. Its biggest boosts were Celgene, and Regeneron, both of which gained more than 5 percent. Biogen rose 4.7 percent.

Approximately 7.16 billion shares changed hands on the major domestic equity exchanges, as compared to a 6.92 billion share average for the last 20 sessions.

Home Resales Rise Unexpectedly

Home resales were unexpectedly higher during May to the third highest monthly level in a decade and a chronic inventory shortage pushed the median home price to an all-time high. The National Association of Realtors said on Wednesday existing home sales increased 1.1 percent to a seasonally adjusted rate of 5.62 million units last month. Sales were up 2.7 percent from May 2016.

The number of homes on the market rose 2.1 percent, but supply was down 8.4 percent from a year ago. Housing inventory has dropped for 24 straight months on a year-on-year basis.

The median house price increased to an all-time high of $252,800, a 5.8 percent jump from one year ago, reflecting the dearth of properties on the market.

“We have a housing shortage, we may even use the term housing crisis in some markets,” NAR chief economist Lawrence Yun said.

House price gains have also been helped by an unemployment rate that is at a 16-year low. Mortgage rates also remain favorable by historical standards.

At the current sales rate, it would take 4.2 months to clear inventory, down from 4.7 months one year ago. The median number of days homes were on the market in May was 27, the shortest time frame since NAR began tracking data in 2011.

Despite robust demand for housing, the sector has shown some recent signs of strain. U.S. homebuilding fell for a third straight month in May to its lowest level in eight months, the Commerce Department reported last week.

Fed’s Quagmire

The outlook for inflation and the future of financial stability are emerging as a quagmire  at the Fed as it debates over how fast to proceed on future interest-rate hikes.

What you have is a distinct change from years past where high unemployment was at the top of the Federal Reserve’s list of concerns. With the unemployment rate at 4.3 percent, many Fed officials are of the opinion that nearly all Americans who want jobs can and do get them.

That is a main reason the Fed recently raised its target range for short-term interest rates for the second time this year, even though recent inflation readings have drifted away from the Fed’s 2-percent target, confounding expectations based on history and theory.

Fed Chair Janet Yellen expressed confidence inflation would eventually perk up, but some policymakers cast doubt.

Chicago Federal Reserve Bank President Charles Evans on Tuesday became the latest to express concerns, stating that he is increasingly concerned that a recent softness in inflation is a sign the Fed will struggle to get price pressures back to its 2 percent objective.

“I will say that the most recent inflation data made me a little nervous about that. I think it’s much more challenging from here on out,” Evans said in an interview with broadcaster CNBC.

Evans, who is a voter this year on the central bank’s rate-setting committee, said that global forces, not just specific one-off reasons, could be behind a retreat in inflation over the past three months. He said on Monday that he supports waiting until the end of the year before considering another rate hike.

Speaking to reporters after a speech at the Commonwealth Club of California, Dallas Fed President Robert Kaplan had similar concerns, stating that he wants to wait for more evidence that the recent retreat in inflation would be temporary.

And though Kaplan said he retains an “open mind” about how many more rate hikes the Fed should deliver this year, he also highlighted an additional worry: the likelihood in his mind that even when fully healthy the economy will need interest rates to stay below 3 percent.

With the 10-year Treasury yield barely above 2 percent, he said, markets are forecasting sluggish growth ahead, and the Fed should be “careful” about lifting short-term rates, now between 1 percent and 1.25 percent, much further. Kaplan, like Evans, votes this year on monetary policy.

Meanwhile two other Fed policymakers, speaking at a conference on macroprudential policy in Amsterdam jointly organized by the Dutch and Swedish central banks, suggested they are concerned less about raising rates too fast or too high than about keeping them too low for too long.

Boston Fed President Eric Rosengren said on Tuesday that the era of low interest rates in the United States and elsewhere poses financial stability risks and that central bankers must factor such concerns into their decision-making.

“Reach-for-yield behavior can be risky,” Rosengren said. He noted financial intermediaries will need to factor in the possibility of lower rates, particularly during economic downturns, and flatter yield curves.

Earlier, at the same conference, Fed Vice Chair Stanley Fischer warned that while the United States and other countries have taken steps to make their housing finance systems stronger, a prolonged period of low interest rates has helped raise house prices, which was a precursor to the last financial crisis.

Neither Rosengren nor Fischer mentioned the economic outlook or current monetary policy in their prepared remarks.

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