The market pullback came after the Bank of Canada once again raised interest rates after leaving rates unchanged for two straight meetings. The Bank of Canada increased its target for the overnight rate by 25 basis points to 4.75%, citing stubbornly high inflation and stronger than expected economic growth.

Also weighing sentiments was caution ahead to next week's key inflation reports and Federal Reserve meeting. Investors are trying to assess the chances of the Fed raising interest rates again next week after raising them at consecutive meetings since last spring. Data show the economy is slowing, but the labor market remains tight, complicating the Fed's decision making.

At the close of trade, the Dow Jones Industrial Average index advanced 91.74 points, or 0.27%, to 33,665.02. The S&P500 index declined 16.33 points, or 0.38%, to 4,267.52. The tech-heavy Nasdaq Composite Index decreased by 171.52 points, or 1.29%, to 13,104.89.

Total 5 of 11 sectors ended lower along with S&P500 index. Energy was top performing sector, rising 2.65%, while a communication service was bottom performing sector, falling 1.87%.

Among individual stocks, Yext Inc soared 38.4% after the New York-based online marketing firm raised its annual earnings forecast.

Campbell Soup fell 8.9% after the packaged food maker posted a lower fiscal third-quarter gross margin, dented by high commodity and freight costs.

Coinbase shares advanced 3.2%, as the company's CEO reassured customers that their funds were safe and blasted the U.S. Securities and Exchange Commission over its lawsuit. On Tuesday, the SEC sued the largest U.S. crypto exchange, accusing it of operating illegally, without having first registered with regulator. Cathie Wood's Ark Invest bought 419,324 shares of Coinbase on Tuesday.

ECONOMIC NEWS: The Commerce Department said the trade deficit increased to $74.6 billion in April from a revised $60.6 billion in March.

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