Updates to market open prices

By Medha Singh and Twesha Dikshit

June 3 (Reuters) - Wall Street's main indexes retreated on Wednesday after a run of record highs, while a fresh Middle East flare-up pushed oil prices higher and cast doubts over a quick end to the war.

Stocks and sectors that led gains in recent days logged the steepest declines. Software stocks .SPLRCIS shed 3.1% following a sharp rebound, while Datadog DDOG.O, Palo Alto PANW.O and IBM IBM.N fell between 6.7% and 7.7%.

Four of the 11 S&P 500 sectors were in the red, with the tech index .SPLRCT leading the declines.

Brent crude futures rose over 2% after an Iranian missile attack damaged Kuwait's airport and the U.S. military carried out strikes near the Strait of Hormuz, raising the risk of further supply disruption that could stoke broader inflation. O/R

"We won't have any drawdown (in U.S. stocks) without some solid evidence of the Middle East situation's influence on unusually high inflation prints... prints with high positive surprise as we did in 2022," said Alexander Lis, chief investment officer at Social Discovery Ventures.

Latest data showed that the U.S. services sector activity picked up in May as businesses preemptively placed orders and rebuilt inventories in anticipation of shortages and higher prices because of the war with Iran.

It came ahead of Friday's closely watched labor market report, which could shape expectations for monetary policy.

Money markets expect the Federal Reserve to keep interest rates on hold for the remainder of the year, with growing odds of a 25 bps rate hike.

At 10:03 a.m. ET, the Dow Jones Industrial Average .DJI fell 278.51 points, or 0.54%, to 51,029.28, the S&P 500 .SPX lost 27.18 points, or 0.36%, to 7,582.48 and the Nasdaq Composite .IXIC lost 134.41 points, or 0.50%, to 26,959.49.

The smallcap Russell 2000 .RUT dropped 1.3%.

The S&P 500 closed above 7,600 for the first time on Tuesday, as all three major indexes ended at records, driven by a run of corporate updates reinforcing expectations of sustained AI spending.

The Philadelphia chip index .SOX slid 0.7%. Broadcom shares AVGO.O dipped 1.2% ahead of the company's quarterly report due after market close. The results would be the next key test of AI-driven momentum. The stock has already risen 14% in the past four sessions.

Marvell Technology MRVL.O bucked the trend and extended gains with a 2% rise, hitting $250 billion in market value, a day after Nvidia CEO Jensen Huang called the chipmaker the next "trillion-dollar company."

Fed Chair Kevin Warsh pledged to follow "the best of the Fed's traditions" in a note to staff at the start of his four-year term.

In other corporate news, asset managers dropped after Switzerland's Partners Group PGHN.S capped withdrawals from an $8.6 billion private equity fund. KKR KKR.N, Blackstone BX.N, Blue Owl OWL.N and Ares Management ARES.N fell between 5.3% and 6.3%.

GameStop GME.N advanced 8.5% after posting a rise in quarterly revenue and unveiling a $2 billion share buyback program.

Meanwhile, Elon Musk's SpaceX plans to price its IPO at $135 a share, ahead of a roadshow, to raise a record $75 billion, a source familiar with the matter told Reuters on Tuesday.

Declining issues outnumbered advancers by a 2.61-to-1 ratio on the NYSE and by a 2.78-to-1 ratio on the Nasdaq.

The S&P 500 posted 19 new 52-week highs and 10 new lows, while the Nasdaq Composite recorded 48 new highs and 74 new lows.