U.S. stocks closed mostly lower on Wednesday as oil prices failed to rebound from a sharp fall during the previous session.
"It just seems to be a fair amount of uncertainty as to where the bottom is," said Daniel Deming, managing director at KKM Financial. He also said the break below $43.80 caused more worries for technical traders.
The S&P 500 closed marginally lower as energy stocks dropped 1.6 percent to lead decliners. The sector briefly erased losses after bullish supply data from the oil market was released.
The Energy Information Administration said Wednesday that U.S. crude inventories decreased by 2.5 million barrels, lifting energy stocks and oil prices.
"The bulls will tell you it's a supply issue, but look no further than China and you'll see lesser demand," said Nick Raich, CEO of The Earnings Scout, noting China's Shanghai composite is lagging other major stock indexes.
Crude futures for August delivery pulled back 2.3 percent to settle at $42.53 a barrel and hit its lowest level since August. Oil prices fell more than 2 percent and entered a bear market Tuesday.
"If we break below $40, all bets are off and the threat of inflation would be over," said Peter Cardillo, chief market economist at First Standard Financial.