The Dow Jones Industrial Average and fell for a second day in a row on Wednesday as investors grappled with key testimonies on U.S.-China trade relations, Federal Reserve monetary policy as well as a host of geopolitical issues.
The 30-stock Dow dipped 72.82 points to 25,985.16 as UnitedHealth underperformed. The S&P 500 slipped less than 0.1 percent to 2,792.38, led lower by the communications services and health care sectors. The Nasdaq Composite eked out a small gain, closing nearly 0.1 percent higher at 7,554.51.
The S&P 500 tech sector closed 0.1 percent lower, snapping a 12-day winning streak. Facebook and Alphabet both closed down. The VanEck Vectors Semiconductor ETF (SMH) fell 1 percent. Micron was one of the biggest laggard in the SMH, sliding more than 3 percent.
Stocks fell to their lows of the session as U.S. Trade Representative Robert Lighthizer hinted that a trade deal was not yet certain, saying that any agreement would need to be more than just purchases by China. The deal would need to be specific and include a matter of enforcement, he said. Lighthizer also noted that it would be a "long process" to implement any deal agreed upon in March.
Lighthizer was testifying in front of the House Ways and Means committee. Trade tensions between the U.S. and China lowered this week after President Donald Trump pushed back a deadline on adding additional tariffs on Chinese goods.
"I think market got a bit ahead of itself in term of optimism" around trade, said Shawn Cruz, manager of trader strategy at TD Ameritrade. "You saw the VIX go below 14 and the market really rallied; the S&P 500 got over 2,800."
"The market is now coming back down to reality," Cruz said.
However, Lighthizer reportedly told The Wall Street Journal that the U.S. is working to formally abandon plans to hike tariffs on Chinese goods as long as talks continue. That is the clearest sign that a deal between the two countries could come soon.
Fed Chairman Jerome Powell testified in front of a House committee. On Tuesday, he told members of the Senate Banking Committee the central banks remains "patient" in its approach to monetary policy. Powell also described the U.S. economic outlook as "generally favorable" but one that faces challenges from abroad.
"If his goal was to make it as boring as possible so as to not disturb markets, he succeeded," said Ed Yardeni, president and chief investment strategist at Yardeni Research. "That's a compliment because Powell's previous off-the-cuff style caused a lot of market havoc. Powell has learned during his short tenure as Fed chairman that consistent messaging is key."
The Fed has been caught in a market crossfire in the past several months, triggered by worries it was on a set policy path and would continue tightening even if conditions weakened.
However, more recently, officials have been conveying a message of patience with the future policy path, including both the approach to interest rates and to reducing the bonds the Fed holds on its balance sheet.
A slew of geopolitical issues also kept investors on edge.
Pakistan said it shot down two Indian jets and carried out air strikes in Kashmir. Tensions have been elevated since a suicide car bombing by Pakistan-based militants in Indian-controlled Kashmir killed at least 40 Indian paramilitary police on Feb. 14, but the risk of conflict rose dramatically on Tuesday when India launched an air strike on what it said was a militant training base.
Meanwhile, a summit between Trump and North Korean leader Kim Jong Un got under way.
The Trump-Kim summit comes ahead of their second summit in less than a year, with investors monitoring whether the meeting can break a stalemate over Pyongyang's nuclear weapons and end more than 70 years of hostility. Trump said he hoped the summit will be "equal or greater" relative to last year's meeting with Kim.
Shares of Lowe's climbed 2.5 percent after releasing its quarterly results. The company also noted the U.S. economy remains "sound."
General Electric also rose 2.1percent after Merrill analyst Andrew Obin said in a note that liabilities from GE Capital's insurance business are "likely contained."
— CNBC's Jeff Cox, Sam Meredith and Reuters contributed to this report.