The Federal Reserve's latest take on the U.S. economy put many investors into sell mode Tuesday, sending stocks mostly lower after a brief upward turn early in the day.
Fed Chair Janet Yellen, speaking before Congress, said the U.S. economy has yet to recover fully, but raised the possibility the central bank could raise its key short-term interest rate sooner than currently projected.
The Fed also issued a report noting that valuations for stocks in some sectors, such as social media and biotech firms, appear to be stretched, sending shares in Facebook, Twitter and LinkedIn lower.
The major U.S. financial market indexes were up slightly in premarket trading as JPMorgan, Goldman Sachs and Johnson & Johnson released quarterly results that exceeded Wall Street's expectations.
Separate reports on U.S. retail sales and manufacturing growth also gave the market an early lift.
But stock indexes diverged shortly after the market opened and then fully veered into the red about an hour into regular trading as investors began to tune into Yellen delivering the central bank's semi-annual economic report to Congress.
Stocks finished the day mixed, with the Dow Jones industrial average eking out a tiny gain on the day.
The Dow added 5.26 points, or 0.03 percent, to 17,060.68. The index is down slightly from its July 3 record of 17,068.65.
The Standard & Poor's 500 index fell 3.82 points, or 0.2 percent, to 1,973.28. The index is down 0.6 percent from its most recent all-time high of 1,985.44 set July 3.
The Nasdaq composite shed 24.03 points, or 0.5 percent, to 4,416.39.