The major U.S. stock indices closed lower on Wednesday, one day after the S&P 500, Nasdaq Composite and Nasdaq 100 all finished at record levels. Today, those indices—and the Dow—never escaped negative territory.The declines were relatively modest for the S&P and Nasdaq indices, with each losing around 0.2%. The Dow fell 0.66%, while the small-cap Russell 2000 was the weakest performer, declining 1.31%. Yesterday’s record celebration gave way to a more cautious session.Treasury yields were mixed. The two-year yield moved lower, but longer maturities edged higher despite a stellar $39 billion 10-year note auction. The bond market did not deliver a broad decline in yields to help equity buyers.U.S. stock market closing levelsDow Industrial Average: Down 342.01 points, or 0.66%, to 51,184.13.S&P 500: Down 17.19 points, or 0.22%, to 7,801.73.Nasdaq Composite: Down 61.10 points, or 0.22%, to 27,538.69.Russell 2000: Down 37.0869 points, or 1.31%, to 2,793.2105.Nasdaq 100: Down 64.61 points, or 0.21%, to 31,160.08.Buyers never got back to unchangedThe session highs tell the story. Even at their best levels, the major indices remained below yesterday’s closes:Dow: Down approximately 115 points at its session high.S&P 500: Down 11.90 points.Nasdaq Composite: Down 52.90 points.Nasdaq 100: Down 54.57 points.Buyers had their shot, but they could not push any of those indices into positive territory.Nevertheless, the S&P and both Nasdaq indices finished relatively close to their session highs. The Nasdaq Composite closed just 8.20 points below its best level, while the Nasdaq 100 finished 10.04 points below its high. That suggests buyers limited the damage in those indices, even though they could not erase the losses.The Dow’s finish was less encouraging, and the Russell’s larger percentage decline showed that the weakness was more pronounced away from the broader technology-heavy indices.Treasury yields: Short end lower, long end higherAt the stock market close:2-year: 4.7703%, down 2.07 basis points.5-year: 5.0284%, up 0.04 basis points.10-year: 5.2816%, up 1.60 basis points.30-year: 5.6622%, up 2.12 basis points.The five-year yield was essentially unchanged, while the gap between two-year and longer-term yields widened.For equities, the distinction matters. Lower short-term yields can offer some relief, but higher longer-term yields keep pressure on borrowing costs and the valuations investors are willing to pay for future earnings. Today’s curve move offered a mixed backdrop.Strong auction demand did not produce a lower closing yieldThe Treasury’s $39 billion 10-year note auction cleared at 5.300%, compared with the pre-auction when-issued yield of 5.317%. That was a strong 1.7-basis-point stop-through.The supplied auction results also showed:Bid-to-cover ratio: 2.77 times.Direct bidders: 17.2%.Indirect bidders: 80.34%.Primary dealers: 2.54%.The high indirect allocation and small dealer share reinforced the strong demand picture. Even so, the 10-year yield remained higher on the day at the stock close. A strong auction was encouraging, but it did not change the direction of the day’s longer-term yield move.The Fed minutes added policy context. Most participants assessed that another rate hike would likely be appropriate by year-end, keeping further tightening in the discussion.Trading lesson: Watch the response after a recordA record close tells traders where the market has been. The next session helps show whether buyers can build on that strength.Today, buyers could not get the major indices back above yesterday’s closes. That is a sign of weaker intraday momentum. However, the modest S&P and Nasdaq declines alone do not establish a broader trend reversal.The next test is follow-through. Buyers would improve the near-term picture by reclaiming yesterday’s closes and staying above them. Sellers would strengthen their case if rebounds continue to fail and downside momentum builds.For newer traders, the lesson is straightforward: judge the headline alongside the price response. Yesterday brought records. Today brought a pullback. Now traders wait for the next shove.Related analysisThe US treasury sells $39 billion of 10 year notes at a high yield of 5.300% versus WI level of 5.317%FOMC Minutes: Most participants assessed another hike would likely be appropriate by year end This article was written by Greg Michalowski at investinglive.com.