After falling as much as 232 points during the session, the Dow Jones Industrial Average ended at 16,197.35, down 175.99 points, or 1.1 percent.
The S&P 500 declined 16.40 points, or 0.9 percent, to 1,828.46, with the financial sector hardest hit and telecommunications the sole sector rising.
Shares of Herbalife fell more than 10 percent after Reuters reported a U.S. senator was calling for a probe of the nutrition company, which has been accused of running a pyramid scheme by hedge-fund manager William Ackman.
The Nasdaq shed 24.13 points, or 0.6 percent, to 4,218.87.
Netflix jumped after it forecast customer growth that beat expectations; McDonald's shares wavered after the fast-food chain and Dow component reported weaker-than-expected quarterly revenue.
Beyond the Chinese news, Randy Frederick, managing director of active trading and derivatives at Charles Schwab, pointed to potential trouble brewing over the nation's borrowing ceiling as a possible trouble spot for Wall Street, saying February could prove to be "a rocky month."
In a letter to Congress, U.S. Treasury Secretary Jacob Lew on Wednesday urged lawmakers to raise the debt limit by Feb. 7 to provide "certainty and stability to the economy and financial markets."
The dollar held steady against other currencies and the 10-year Treasury yield dropped 9 basis points to 2.78 percent.
For every share falling, two rose on the New York Stock Exchange, where 780 million shares traded. Composite volume approached 4 billion.