Stocks fell lower Wednesday, as concerns over more potential interest rate hikes from the Federal Reserve weighed on market sentiment. The Dow Jones Industrial Average dropped nearly 200 points, while the S&P 500 and Nasdaq Composite lost 0.7% and 1%, respectively.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY  ): -0.70% or -31.35 points to 4,465.48

Dow Jones Industrial Average (DIA  ): -0.57% or -198.78 points to 34,443.19

Nasdaq Composite Index (QQQ  ): -1.06% or -148.48 points to 13,872.47

In the spotlight, the U.S. services sector expanded at a faster-than-expected rate in August, according to the Institute for Supply Management's reading on Wednesday. The ISM Services Index reading came in at 54.5% last month, up 1.8 percentage points from July's reading and topping Wall Street expectations. Beneath the headline, the prices component of the index rose 2.1 percentage ports to 58.9% in August, coming in at a four month high.

Following the services report, traders raised the probability that the Fed will increase rates at its November meeting to more than 40%, according to the CME Group's FedWatch tool. Market participants still mostly agree the central bank will maintain its benchmark interest rate between 5.25% to 5.50% later this month, according to CME Group, holding above a 90% probability.

In the afternoon, the release of the Fed's Beige Book on Wednesday showed the U.S. economy saw "modest" growth in July and August as price growth and hirings slowed. The report also revealed that businesses in several districts struggled last month as the cost of making goods grow at a faster pace than prices.

Tech also can under pressure, fueled in part by the European Union naming companies including Amazon (AMZN  ), Apple (AAPL  ), Alphabet (GOOG  ) (GOOGL  ), Meta Platforms (META  ) and Microsoft (MSFT  ) "gatekeepers" under the European Commission's new Digital Markets Act. That term means the EU believes these firms restrict access to services such as search and messaging. The Digital Markets Act aims to encourage greater competition in digital markers and provide greater choice for consumers.

On the earnings front, Zscaler (ZS  ) shares slipped lower despite the company's strong earnings report for its fiscal fourth quarter. The cloud security company expects earnings and revenue to top analyst expectations for the current quarter. GitLab (GTLB  ) shares rose after the tech platform reported better-than-expected second quarter earnings and strong third quarter revenue guidance.

Elsewhere, Roku (ROKU  ) shares rose more than 10% after the company announced plans to lay off 10% of its workforces in effort to lower expenses. The streaming company also plans to consolidate office space and perform a strategic review of its content offerings. Roku said the cost of these restructuring efforts is expected to be between $45 million and $65 million. The company also raised its third quarter guidance, now forecasting for revenue in a range of $835 million to $875 million.

Southwest Airlines (LUV  ) narrowed its third-quarter revenue outlook as the carrier expects higher fuel costs on Wednesday. The airline now expects a 5% to 7% decline in unit revenue from last year in its current quarter. Southwest also said it anticipates fuel costs to average $2.70 to $2.80 per gallon in the third quarter.

For Thursday, market participants will react to a series of Fedspeak from Philiadeplia, Chicago, New York and Atlanta presidents.