Earlier on Wednesday, the president's Strategic and Policy Forum disbanded. The disbanding came as backlash against Trump grew following remarks he has made following the violent protests in Charlottesville. On Tuesday, Trump appeared to equate torch-bearing white nationalists with the protesters who demonstrated against them.
After news that the forum was being disbanded, Trump tweeted:
"The market is gauging future expectations for the Trump agenda," said Michael Arone, chief investment strategist at State Street Global Advisors. This, coupled with the back-and-forth with North Korea last week, "raises uncertainty about the path of future policies."
"There's just too much uncertainty," Arone said.
Stocks briefly popped after the Federal Reserve released the minutes from its July 26 meeting at 2 p.m. in New York. The minutes showed Fed officials were split over the path of future monetary policy. Some officials preached caution while another raised concern over delaying the normalization process.
Investors largely expect the central bank to start unwinding its massive $4.5 trillion bonds portfolio — which it accrued trying to stem the economic downturn from the financial crisis — in September.
But the market is also split as to whether the Fed will raise rates once more this year. Market expectations for a December rate hike were about 43 percent, according to the CME Group's FedWatch tool.
"I do think there's going to be a rate hike later this year," said Jason Thomas, chief economist at AssetMark. "Nothing has changed. ... But I think the headlines about the officials disagreeing will lower expectations of a rate hike" in the market.