U.S. stocks retreat ahead of Yellen speech

U.S. stocks closed lower on Wednesday, as investors became cautious ahead of a key speech from U.S. Federal Reserve's Chair Janet Yellen.

The Dow Jones Industrial Average shed 65.82 points, or 0.35 percent, to 18,481.48. The S&P 500 was down 11.46 points, or 0.52 percent, to 2,175.44. The Nasdaq Composite Index lost 42.38 points, or 0.81 percent, to 5,217.69.

Traders kept a close eye on Yellen's speech for more clues on the timing of the next interest rate hike. She is scheduled to deliver a speech Friday on the U.S. economy and monetary policy at the Economic Policy Symposium at Jackson Hole, Wyoming.

"Will the Fed raise rates on September 21? Market probability is now 28 percent, up from near zero in June, but not up much," said Chris Low, chief economist at FTN Financial, Wednesday.

However, some Fed officials' hawkish comments have strengthened market expectations that the central bank might raise interest rate later this year.

Trading volumes have been below average recently as the earnings season winds down and as traders stay away from major bets ahead of a firmer handle on monetary policy, according to the Reuters.

On the economic front, U.S. existing-home sales lost momentum in July and decreased year-over-year for the first time since November 2015, according to the National Association of Realtors Wednesday.

Total existing-home sales fell 3.2 percent to a seasonally adjusted annual rate of 5.39 million in July from 5.57 million in June.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, increased 8.64 percent to end at 13.45 on Wednesday.

Oil prices tumbled Wednesday as official data showed an unexpected increase in U.S. crude inventories.

U.S. stocks ended higher Tuesday, with the Nasdaq hit a record intraday high, as Wall Street digested a batch of positive earnings reports. Enditem