Stocks dipped on Wednesday after a private sector jobs report came in lower than expected, leading investors to pull out of the broader market. Cyclical stocks, which are tied closely to economic recovery, were some of the weakest performers during the session, with Energy (XLE  ), Financials (XLF  ) and Industrials (XLI  ) all declining.

Meanwhile, shares of Robinhood (HOOD  ) surged by 50% on Wednesday, with the no-commission online brokerage continuing its volatile jump following last week's lackluster debut.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY  ): -0.46% or -20.49 points to 4,402.66

Dow Jones Industrial Average (DIA  ): -0.92% or -323.73 points to 34,792.67

Nasdaq Composite Index (QQQ  ): +0.13% or +19.24 points to 14,780.53

Fed's Clarida sees interest rate hikes in 2023:

Federal Reserve Vice Chairman Richard Clarida told the Peterson Institute for International Economics on Wednesday that the central bank is likely to reach its economic targets by the end of next year and may start raising interest rates in 2023.

Clarida noted that inflation is tracking to meet and exceed the central bank's 2% goal in 2022, reported by CNBC, even as the jobs market still has a long road towards pandemic recovery. Meeting that target will lead the Fed to start tightening its monetary policy.

However, Clarida did not give a specific timeline for when the central bank will start tightening its policy, with the Fed planning to continue its $120 billion monthly purchases of U.S. Treasury securities and mortgage bonds for the foreseeable future.

Services sector surges to record high in July:

The Institute for Supply Management's (ISM) services index reading for July surged to a record high, with business activity rising as consumer demand recovers during the summer.

The headline index reached an all-time high of 64.1 in July, raising from 60.1 in June, according to the ISM's monthly report. This was above the 60.5 expected by consensus economists, according to Bloomberg, and was above the neutral level of 50.0, representing expansion in the sector.

Here's how the market started trading soon after open:

S&P 500 Index: -0.34% or -15.07 points to 4,408.08

Dow Jones Industrial Average: -0.58% or -202.80 points to 34,913.60

Nasdaq Composite Index: -0.07% or -10.17 points to 14,751.52

Private payroll additions slowed in July:

Private sector payroll additions slowed more-than-expected in July, reflecting the labor market's choppy recovery as the economy tries to recover its pandemic losses.

The ADP's monthly private payroll report published Wednesday showed that 330,000 jobs were added to the labor market last week, far below the 690,000 expected by consensus economists. In June, private payrolls were also revised lower to 680,000.

Most of July's gains were from the service sector, which is one of the areas of the economy that lost the most jobs throughout the pandemic due to public health related restrictions. Leisure and hospitality payrolls increased by 139,000 in July, representing more than 40% of the overall headline gain, but was sharply lower than the 300,000 jobs added in June.