U.S. stocks closed lower on Wednesday, with health care shedding more than 1.5 percent, while investors eagerly awaited a speech from Federal Reserve Chair Janet Yellen.
The benchmark S&P 500 closed about 0.5 percent lower, with health care posting its worst trading day since June 24. Health care began falling sharply in afternoon trade after Democratic presidential nominee Hillary Clinton tweeted about the recent price hikes on EpiPens, marking the second time in about a year the former Secretary of State pressured the sector with a comment.
"We almost got to the point where maybe it was safe to get back into health care," said Art Hogan, chief market strategist at Wunderlich Securities. "It was like Hillary Clinton got something to react to rather than something she presented on her platform."
The Dow Jones industrial average fell approximately 60 points in choppy trade, with UnitedHealth Group contributing the most losses.
"It's low volume. ... A quiet market is easily pushed around," said Robert Pavlik, chief market strategist at Boston Private Wealth. He also said: "I think the market is waiting a little bit on the edge of its seat for Yellen's speech."
"That's the number 1 thing markets are going to be focused on," said Matt Tuttle, chief investment officer at Tuttle Tactical Management, referring to Yellen's speech. "I don't think anyone has too much conviction ahead of that speech."
S&P health care sector 2-day chartSource: FactSet
Stocks traded slightly lower for most of the session before health care and biotech began to slide.
"The biggest problem is there is no worthy news to move the market right now," said Bruce McCain, chief investment strategist at Key Private Bank.
"We've been in a very tight range and the VIX is low ... and that signals complacency," said Jeff Kravetz, regional investment strategist at the Private Client Reserve at U.S. Bank. He also said he was advising clients to be cautious heading into the fall.
Yellen is scheduled to speak on the U.S. economy and monetary policy Friday at 11 a.m. ET against a backdrop of recent hawkish rhetoric from two of her top lieutenants, New York Fed President William Dudley and Fed Vice Chairman Stanley Fischer.
"What's amazing is we've recently geared up for something big from the Fed, and then there's a big nothing," said JJ Kinahan, chief strategist at TD Ameritrade. He also said he expects Yellen's speech to be a non-event.
Key Private Bank's McCain said investors are hoping Yellen does not say too much that could move the market. "It's a boring time in the markets and investors are hoping it stays boring because prices keep going up," he said.