NEW YORK (TheStreet) -- A crude oil selloff stopped another stock rally in its tracks on Wednesday. 

Stocks soared early extending gains made on Tuesday until the Energy Information Administration, a government agency, lowered its forecast for crude prices through 2016 prompting a decline across commodities. 

Losses accelerated into the close  as the S&P 500  finished 1.4% lower while the Dow Jones Industrial Average fell 1.5% and the Nasdaq slid 1.2%. All three benchmark indexes climbed as much as 1% earlier in the session before backpedaling. 

Crude oil prices are expected to average $49.23 a barrel this year, down from estimates of $49.62, the EIA said in a monthly report that reflected lukewarm assumptions about the direction of the global economy. Oil prices in 2016 are forecast to climb to $53.57, less than previous estimates that prices would reach $54.42.

West Texas Intermediate crude closed 3.9% lower to $44.15 a barrel as energy stocks proved to be the worst performer on equity markets. Among major oilers, Exxon Mobil (XOM) fell 2%, Chevron (CVX)  dropped 2.5% and BP (BP) slid 1.6%.

But oil wasn't the only thing that torpedoed the market's initial gains. Investor pessimism grew as a report showing more job openings than expected raised fears that the Federal Reserve had another reason to hike rates sooner than later. A rate hike is widely viewed as likely to diminish the supply of money going into equities.

Job openings in the U.S. rose to 5.75 million in July from 5.32 million in June, according to the Labor Department. The July reading is its highest since the government began recording data in December 2000. The data is the latest to show significant tightening in the labor market, one of the Fed's signals for a rate hike.

World Bank chief economist Kaushik Basu joined other high-ranking economists in calling for the Fed to delay a rate hike as the global economy faces uncertainty. International Monetary Fund head Christine Lagarde has also called upon the Fed to hold on raising rates for the first time since 2006.

"The world economy is looking so troubled that if the U.S. goes in for a very quick move in the middle of this I feel it is going to affect countries quite badly," Basu told The Financial Times.

The Fed will meet on Sept. 16-17 to determine whether the U.S. economy is strong enough to withstand a move off of crises-level interest rates.

But the likelihood of a September rate hike is looking less likely. The Fed funds futures is currently pricing in a probable hike at less than 25%.

"Relying on the latest data to make the final determinant, a slower-than-expected rise in August employment, a two-year low in manufacturing and two-month low in service activity, and another benign inflation report suggests some Fed officials may be increasingly reluctant to pull the trigger at the Sept. 17 meeting," said Lindsey Piegza, chief economist at Stifel.

Monetary stimulus hopes in China drove markets higher on Tuesday. Wall Street came back from the Labor Day weekend with a bang as stocks surged more than 2% and the benchmark indexes reversed Friday's losses.

During its annual product event, Apple (AAPL) announced a revamped Apple TV which will feature voice commands using voice-activated personal assistant Siri and a touch interface. The company also unveiled a larger iPad, which will measure 12.9 inches on the diagonal, and a stylus for the iPad called Pencil which will retail for around $99.

Netflix (NFLX) climbed more than 4% on news it will continue to infiltrate the Asian market. The streaming service is reportedly gearing up to launch in South Korea, Hong Kong, Singapore and Taiwan at the beginning of next year.

Yahoo! (YHOO)  was up 2% even after the company said a planned spinoff of its stake in Chinese e-retailer Alibaba  (BABA)  had stumbled. The company said the Internal Revenue Service had rejected a special tax ruling request on the deal which would have saved Yahoo! money in the spinoff.

Stories about a possible rate hike:

The U.S. Is Being Told How to Run Its Monetary Policy -- and We Should Get Used to It

Why the Federal Reserve Won't Raise Rates at Its September Meeting

Why It's So Hard for the Fed to Raise Interest Rates