"When we started to fall, volume picked up quite a bit—seems like people are anticipating and preparing for the selloff," noted Bliss.
NYSE total volume topped 4 billion shares for the first time since January 2.
Minutes from the Fed's latest meeting showed that policymakers remain divided on the timing and amount of asset purchases, with some members saying that the bond buying program may need to end prior to the achievement of the central bank's previously announced goal of improvement in employment.
In January, policymakers voted to keep its QE3 policy, at a $85 billion monthly pace, while committing to hold interest rates near zero until unemployment reaches 6.5 percent.
"If the economic numbers continue to be good or OK, [the Fed] will try to phase out this asset purchase plan, so I don't think they're going to continue to buy $85 billion a month all the way through December and sometime in 2014, we might see our first rate hike," said David Kelly, chief global strategist at JPMorgan Funds. "[But for now,] this is pretty positive for the equity market—...the Fed feels good about the economy and is committed to keeping rates low."
In addition, traders pointed to rumors that some hedge funds had been forced to sell their positions across several commodities, putting pressure on materials and energy.
(Read More: Cramer: There's a 'Great Schism' in This Market)
So far, the Dow and S&P 500 have gained an impressive 7 percent since the beginning of the year. The Dow is less than 2 percent of its all-time closing high of 14,164.53 hit on October 9, 2007.
(Read More: When Will This Big Pullback Finally Happen?)
"We're not surprised to see the market take a bit of a breather," said Cam Albright, director of asset allocation at Wilmington Trust Advisors. "We still like owning stocks—if you look out another two to three quarters, it's still not a bad picture—economic growth will be in the 2 to 2.5 percent range, China will avoid it hard landing, fiscal issues will get further resolved, Europe will be more stable, and the Fed will continue to support the market."