The U.S. dollar traded about 0.8 percent higher against major world currencies, with the euro near $1.08, touching its lowest level since August. The yen traded near 121.57 yen against the greenback.
In the afternoon, New York Fed President William Dudley told reporters that he would "completely agree" with Yellen's remarks that December is still a possibility, Reuters said. His speech on looking beyond the macro economy did not discuss the current state of U.S. monetary policy.
Fed Vice Chair Stanley Fischer speaks at 7:30 p.m. on central bank independence at the National Economists Club.
"This is the crescendo of Fed speakers. You have Dudley, Fischer and Yellen, and I think all of that helps because it coalesces around (raising rates in) December," said Art Hogan, chief market strategist at Wunderlich Securities.
Before the open, Fed Gov. Lael Brainard spoke in Frankfurt, saying the Fed is "very dependent" on incoming data, but that there have been some tightening of economic conditions.
Philadelphia Fed President Patrick Harker did not comment on the U.S. economy and monetary policy in prepared remarks for a speech on social innovation capital, Reuters reported.
Read MoreTraders brace for Fed, data deluge
Economic data gave a somewhat mixed view on the services sector, which remains well in expansion territory. The non-manufacturing ISM October report showed a rise to 59.1 from 56.9 the prior month. However, Markit said its October PMI services index declined to 54.8 from 55.1 in September.
With two days to Friday's nonfarm payrolls report, the ADP employment report showed private companies added 182,000 jobs in October.
September's trade deficit came in at $40.8 billion, its lowest level in seven months, Reuters reported.
In other economic news, weekly mortgage applications fell 0.8 percent last week as interest rates rose.
Stock index futures held higher after the data releases, with the Dow futures up about 40 points.
European stocks closed mixed, with Volkswagen weighing on the DAX but the STOXX Europe 600 up about half a percent.
Glencore gained more than 5 percent in London trade after the firm said it was on track to reduce its debt thanks to asset sales and was making deeper cuts in copper output to support weak prices, Reuters reported.
In earnings news, Tesla reported an adjusted quarterly loss and in-line revenue, but focused more on an upbeat production outlook for the electric car maker.
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Facebook and Qualcomm are among the firms reporting after the close.
"I do think the market has digested the impact of the dollar, slowdown in China, (and low) oil prices into earnings," said Maris Ogg, president of Tower Bridge Advisors. "Now earnings can stand on their own again and we have much easier comparisons. People are recognizing that next year is not going to be a bad year."
"I think the market has a much healthier outlook. ... People understand the economy is not weakening. We don't have a recession staring at us," she said.
The Dow Jones industrial average closed down 50.57 points, or 0.28 percent, at 17,867.58, with Merck leading advancers and UnitedHealth and Walt Disney leading decliners.
The S&P 500 closed down 7.48 points, or 0.35 percent, at 2,102.31, with energy leading eight sectors lower and utilities and information technology the only advancers.
The Nasdaq closed down 2.65 points, or 0.05 percent, at 5,142.48.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, held near 15.
About three stocks declined for every two advancers on the New York Stock Exchange, with an exchange volume of 933 million and a composite volume of nearly 4.1 billion in the close.
Gold futures settled down $7.90 at $1,106.20 an ounce.
—Reuters and CNBC's Peter Schacknow contributed to this report.
On tap this week:
Earnings: Facebook, MetLife, Qualcomm, CF Industries, Whole Foods, GoDaddy, King Digital
7:30 p.m.: Fed Vice Chair Stanley Fischer on central bank independence before National Economists Club
Earnings: AstraZeneca, Toyota Motors, Molson Coors Brewing, Disney,Kraft Heinz, Monster Beverage, News Corp., Nvidia, Symantec, TripAdvisor, Dreamworks Animation, Shake Shack
Chicago Fed President Charles Evans gives welcoming remarks at banking conference
8:30 a.m.: Jobless claims, productivity and costs
8:30 a.m.: Philadelphia Fed's Patrick Harker on energy interdependence
8:30 a.m.: New York Fed's Bill Dudley opening remarks at financial services industry conference
9:10 a.m.: Fed Vice Chair Stanley Fischer on IMF panel on reforming financial services
1:25 p.m.: Fed Gov. Dan Tarullo on regulation of international banks at Chicago bank conference
1:30 p.m.: Atlanta Fed President Dennis Lockhart at Joint Central Bank conference, Switzerland
4 p.m.: Former Fed Chairman Ben Bernanke on Fed policy at IMF conference
Earnings: Allianz, Cigna, Humana
8:30 a.m.: October employment report
9:10 a.m.: St. Louis Fed President James Bullard on policy and economy
3:00 p.m.: Consumer credit
4:15 p.m.: Fed Gov. Lael Brainard on policy panel at IMFconference
11:10 p.m.: San Francisco Fed President John Williams on outlook and economic education
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