"On average, over the last 50 years, September has been the worst month of performance for the S&P 500 Index by far," wrote Scot Wren, senior equity analyst at Wells Fargo Advisors. "Over the next few weeks, investors will be presented with a number of issues that are going to drive stock market behavior in at least the nearer term and possibly much longer."
"The list is long," he continued. "The future of the Fed's QE program, Syria, the debt ceiling debate in Congress and German elections to name a few."
On the economic front, the pace of growth in the services sector rose to its highest since December 2005, according to the Institute for Supply Management.
The 10-year Treasury yield topped 2.97 percent following the report, hitting a fresh two-year high.
(Read more: Art Cashin: Beware this market 'trip wire')
But factory orders dropped 2.4 percent in July, according to the Commerce Department.
On the jobs front, weekly jobless claims declined to a near five-year low, according to the Labor Department. And the number of jobs in the private sector grew by 176,000 in August, up from 200,000 jobs created in the previous month, according to payroll processing giant ADP.
Meanwhile, the number of planned layoffs soared to hit its highest in nearly six months, according to a report from consultants Challenger, Gray & Christmas.
The trio of employment data came a day ahead of the Labor Department's widely-watched employment report on Friday, almost two weeks before the Fed's September policy-setting meeting. Economists polled by Reuters expect non-farm payrolls to have increased by 180,000 jobs last month, up from a gain of 162,000 the month prior.
(Read more: To taper or not: Jobs scrutinized for next Fed move)
"Uncertainty's always a negative in the short-term for the market, but the underlying trend in the economy has been good and that's a positive," said John Fox, co-manager of the FAM Value Fund.