The Dow Jones Industrial Average slipped 10.88 points, or 0.03 percent, to 33,136.37. The S&P 500 sank 15.36 points, or 0.40 percent, to 3,824.14. The Nasdaq Composite Index dipped 79.50 points, or 0.76 percent, to 10,386.99.
Six of the 11 primary S&P 500 sectors ended in red, with energy and technology down 3.63 percent and 1.01 percent, respectively, leading the laggards. Communication services rose 1.39 percent, the best-performing group.
The above market reactions came after data released Tuesday showed a deepening contraction in the U.S. manufacturing sector.
The seasonally adjusted S&P Global US Manufacturing Purchasing Managers' Index fell to 46.2 in December from 47.7 in November, signaling the fastest decline in operating conditions since May 2020.
The Federal Reserve will publish the minutes from its December meeting on Wednesday, and investors will pore through the readout for clues on the central bank's next move.
Last month, the Fed raised interest rates by 50 basis points, bring the target range for the federal funds rate to 4.25-4.5 percent, as part of its latest attempt to rein in inflation.
U.S. equities had a brutal 2022, which saw the Dow drop 8.8 percent, while the S&P 500 tanked 19.4 percent and the technology-heavy Nasdaq slumped 33.1 percent. The three major averages suffered their worst year since 2008.
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