Stocks fell after a brief rally that began around noon in New York and was attributed to a large options trade.

Investors received new economic data on Wednesday, with data showing strong growth at US service providers and companies hiring at a steady pace, potentially complicating the Federal Reserve's war on inflation. Comments from Fed Bank of San Francisco President Mary Daly, who sees a high bar for slowing the 75-basis-point pace of hikes as she watches data between now and the November meeting, did not help sentiment. Daly also stated that the expectation of cuts next year is misplaced.

A report released today illustrated the abrupt swing in borrowing costs as the Fed intensifies its inflation fight. Mortgage rates in the United States jumped to a 16-year high of 6.75%, marking the seventh weekly increase and sparking the worst slump in home loan applications since the pandemic's peak.