Stocks came off session lows by late morning Wednesday, though remained deep in the red as the energy sector led a steep selloff. 

The S&P 500 tumbled 1.1%, the Dow Jones Industrial Average was down 1.2%, and the Nasdaq slipped 0.75%.

Crude oil prices fell to 11-year lows after crude inventories fell at a slower-than-expected pace in the past week. Domestic stocks fell by 5.1 million barrels in the week ended Jan. 1, slower than a forecast drop of 5.6 million barrels. 

Commodity traders have faced concerns over oversupply, global production at record highs, and weakening demand, even as tensions between Saudi Arabia and Iran earlier this week boosted hopes over supply disruptions. West Texas Intermediate crude fell 2.4% to $35.10 a barrel on Wednesday. 

The energy sector was the worst performer on markets. Chevron (CVX) , Exxon Mobil (XOM) , and Royal Dutch Shell (RDS.A) each fell more than 1%, while the Energy Select Sector SPDR ETF (XLE) slid 3.3%. 

North Korea announced Wednesday it carried out a successful hydrogen bomb test in what state media called protection against the "ever-growing nuclear threat and blackmail by the U.S.-led hostile forces." The detonation marks the fourth time North Korea has tested nuclear bombs.

The latest development in North Korea added to fears of national security already exacerbated by ISIS and rising tensions in the Middle East. Over the weekend, Saudi Arabia broke off diplomatic ties with Iran after protesters torched a Saudi Arabian embassy in Tehran.  

Minutes from the Federal Reserve's December meeting were on tap for release Wednesday afternoon. The meeting resulted in the first rate hike in nearly a decade. Investors will be keen to parse comments from Fed members to discern the likely pace of future hikes.

The current rate hike estimates are too low, according to Fed Vice Chairman Stanley Fischer. In an interview with CNBC, Fischer said the market's expectation for only two hikes this year was an underestimate and that the dot plot matrix's forecast of four was more "in the ballpark." However, Fischer noted that, as always, the Fed will respond to incoming data.

The U.S. services sector in December grew at its slowest pace in nearly a year. The latest PMI Services Index fell to 54.3, its weakest growth since January 2015, on increased uncertainty over the economic outlook and weaker confidence among consumers. 

U.S. factory orders in November fell 0.2% to $472.2 billion as analysts had expected. Orders jumped 1.3% in a month earlier. 

The U.S. trade deficit fell 5% in November to $42.4 billion, the smallest level in a year as both imports and exports tumbled. Exports fell 0.9% to their lowest level since early 2012 in November, while imports sank 1.7%. The lower trade deficit was due to increased stockpiling of electronic goods pushing imports lower, while lower oil and commodity prices decreased the overall deficit. 

"In coming months, export growth will likely remain weak due to soft global growth and the strength in the dollar," Kevin Cummins, U.S. economist at RBS Securities, wrote in a note. "Meanwhile, imports will likely re-accelerate (once stockpiles are better aligned with demand) since growth in consumer spending is expected to remain healthy in 2016."

In overnight trading, China's yuan plummeted to five-year lows, while the latest read on its services sector weakened to the worst level in 17 months. China's Shanghai Composite closed 2.3% higher, however, after state media reported that officials would extend a ban on major shareholders selling stock. The ban was due to expire next week.

The U.S. economy added 257,000 jobs to private payrolls in December, according to the latest ADP employment report. The reading was far better than an expected 190,000 increase. The official nonfarm payrolls report will be released on Friday morning.

Valeant Pharmaceuticals (VRX) fell 3% after appointing former Chief Financial Officer Howard Schiller as its interim chief executive to replace sitting CEO Michael Pearson. News broke last week that Pearson was hospitalized for pneumonia. Schiller acted as financial chief from late 2011 until mid-2015 and currently sits on the board. 

Apple (AAPL) fell more than 2% on renewed fears of fewer future sales of its flagship product, the iPhone. Component suppliers in China reportedly dismissed workers earlier than normal for the Chinese Lunar New Year break due to fewer orders, according to MarketWatch. Apple shares fell a day earlier on reports the tech giant expects to cut current-quarter output by 30% as it deals with inventory backlog at retailers in China and Europe.

Monsanto (MON) shares fell 1% after the agricultural chemicals company reported a mixed quarter. A first-quarter loss of 11 cents a share was half as deep as expected. Meanwhile, revenue tanked 23% to $2.22 billion on weaker demand.

Chipotle (CMG) fell 2% after guiding for fourth-quarter profit and sales well below estimates as it faces the fallout of an E.coli outbreak. The burrito chain expects quarterly profit no higher than $1.90 a share, below an average $2.54 estimate. Same-store sales are anticipated to fall 14.6%. The company also received a federal grand jury subpoena from the U.S. District Court of California and said it would cooperate fully with the investigation.

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