Stocks traded lower Wednesday, with energy lagging, as investors analyzed employment data and looked ahead to Friday's jobs report.
The Dow Jones industrial average fell more than 100 points in midday trade, with Goldman Sachs and Chevron contributing the most losses.
The S&P 500 fell about 0.6 percent, as energy and materials fell more than 1 percent. Energy extended losses after the Energy Information Administration said inventories rose by 2.3 million barrels last week. U.S. crude prices fell more than 3 percent to $44.95 a barrel.
"Basic materials, especially metals, are also tanking. Some of the areas that were giving support to the market are not doing well," said Chuck Self, CIO of iSectors.
The Nasdaq composite fell about 0.6 percent, as the iShares Nasdaq Biotechnology ETF (IBB) dropped 1.2 percent.
The Dow and the S&P also erased all their gains for August, while the Nasdaq held about 0.6 percent higher month to date.
"I think there's a real trepidation surrounding Friday's number," said Quincy Krosby, market strategist at Prudential Financial. "The report we get for August is often weaker than expectations. You don't want a much weaker number that suggests the economy is weakening, but you don't want a much stronger report."
Private companies added 177,000 jobs in August, according to the latest report from ADP and Moody's Analytics. Economists polled by Reuters expected a gain of 175,000.
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There was "nothing too surprising and there were no real implications for the number we're going to get Friday," said Scott Brown, chief economist at Raymond James.
Wall Street expects the August jobs report, due Friday at 8:30 a.m. ET, to show the U.S. economy added 180,000 jobs.
"The BLS numbers have been unusually volatile. You had that low number in May and then you had these two huge numbers in June and July," Raymond James' Brown said.
Other data released Wednesday included the Chicago PMI for August, which came in at 51.5. Pending home sales rose 1.3 percent in July.
Prudential's Krosby said the benchmark 10-year yield could see a sharp move higher "if there is an upside surprise" to Friday's number. On Wednesday, U.S. Treasurys traded higher, with the two-year note yield near 0.78 percent and the 10-year yield around 1.57 percent.
Friday's number could also change market expectations for a rate hike in September. According to the CME Group's FedWatch tool, expectations for a hike in September were 27 percent.
"I don't think it's prudent for them to raise rates before the election," said Randy Warren, chief investment officer at Warren Financial Service. "If they do raise rates in September, the market won't like that too much; and we'll probably see a swoon."
Raymond Jame's Brown said the U.S. central bank was leaning toward raising rates, "but policy will still be very accommodative."
"They are not going to react to Friday's number per se; they're going to look at the underlying trend," which is strong, Brown said.
Wednesday was the last trading day in August, a month in which stocks have held in a very tight range amid low volume and volatility. The S&P had not closed 1 percent higher or lower in any session in August entering Wednesday. In fact, the benchmark index posted its 37th straight session without doing so on Tuesday.
That said, the financials sector was leading the S&P for the month, advancing more than 2.5 percent. "We'll see if the financials continue to point to a rate hike," said Prudential's Krosby.
September has been a volatile month for stocks over the past decade. The last time the S&P ended September with a move less than 1 percent was 2005.