The declines Wednesday were led by energy stocks as the price of crude oil fell sharply.
Traders also worried that a report showing that the number of available jobs soared in July could help convince Federal Reserve policymakers to raise interest rates later this month.
The Dow Jones industrial average lost 239 points, or 1.5 percent, to 16,253.
The Standard & Poor's 500 index gave up 27 points, or 1.4 percent, to close at 1,942. The Nasdaq composite declined 55 points, or 1.2 percent, to 4,756.
Barnes & Noble plunged 28 percent after reporting a wider first-quarter loss as sales of its Nook e-reader and digital books fell sharply.
Oil slumped 4 percent to $44.15 a barrel.