Stocks finished lower for the sixth-consecutive session Wednesday as investors worried over a slowing recovery following Ben Bernanke's grim outlook and after the Fed's latest Beige Book, which showed signs of a slowdown in several regions.
The Dow Jones Industrial Average fell 21.87 points, or 0.18 percent, to finish at 12048.94.
Cisco and Alcoa were the biggest laggards on the blue-chip index.
The S&P 500 slipped 5.38 points, or 0.42 percent, to end at 1279.56.
The Dow and the S&P have yet to close higher in June, declining approximately 4 and 5 percent, respectively.
The tech-heavy Nasdaq tumbled 26.18 points, or 0.97 percent, to close at 2675.38.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, gained almost 4 percent to close at 18.79.
Among the key S&P sectors, materials and banks sagged, while energy advanced.
Growth slowed in some U.S. regionsduring May, due to higher food and energy costs as well as supply disruptions stemming from Japan's earthquake took a toll, according to the Fed's periodic "Beige Book" summary.
This follows a late-session market selloff Tuesday after Bernanke said the U.S. economy had suffered a "loss of momentum"but that he still expected growth to pick up again, making a third round of quantitative easing unnecessary. (Read More: Don't Blame Bernanke for Market Drop)
Bernanke’s cautious tone is worrying investors, according to Scott Brown, chief economist at Raymond James.
“There’s belief of a temporary slow patch and things are still going to be far below our potential and as such, the Fed’s going to be accommodative for now,” said Brown.
Brown expects a “long summer” ahead for the market, but long-term prospects are “still looking strong” for investors who are willing to be patient.
Meanwhile, strategists at Capital Daily said QE3 is unlikely this year and that equities are "likely to struggle"—with the S&P falling to 1,200 by year-end—even if the economy picks up.
Oil prices rallied after OPEC unexpectedly left its production levels unchanged and following a weekly government report that showed crude inventories fell more than expected. U.S. light, sweet crude gained $1.65 to settle at $100.74 a barrel. London Brent Crude gained $1.07 to settle at $117.85 a barrel.
ExxonMobil gained after the Dow component said it made several major oil and natural gas discoveries in the deepwater Gulf of Mexico.