The Dow Jones Industrial Average decreased 121.43 points, or 0.39 percent, to 31,270.09. The S&P 500 was down 50.57 points, or 1.31 percent, to 3,819.72. The Nasdaq Composite Index shed 361.04 points, or 2.70 percent, to 12,997.75.
Eight of the 11 primary S&P 500 sectors ended in red, with technology down 2.49 percent, leading the laggards. Energy rose 1.43 percent, the best-performing group.
A rapid rise in bond yields unnerved investors, who rushed to dump risk assets, especially high-flying tech shares.
The yield on the benchmark 10-year U.S. treasury gained steam, climbing to 1.48 percent Wednesday afternoon, from 1.41 percent in the prior session. The yield on the 30-year U.S. treasury also advanced.
Meanwhile, U.S.-listed Chinese companies traded mostly lower with eight of the top 10 stocks by weight in the S&P U.S. Listed China 50 index ending the day on a downbeat note.
On the data front, U.S. services Purchasing Managers' Index (PMI) fell to 55.3 percent in February from 58.7 percent in January, the Institute for Supply Management reported on Wednesday. February's reading fell short of analysts' estimates. Readings above 50 percent indicate that businesses are expanding.
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