The S&P 500 slipped out of the 70-point trading range it has been stuck in since March, falling below 2,040 to as low as 2,035.73. The gauge erased its gain for the year and is now 4.5 percent below its May record. The benchmark slid through its average price for the past 200 days for the fourth time this month, failing to rise back above it by the close for the first time since July 9.

"Until today we've had nothing to break us out of the bottom or top end of the trading range," Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said by phone. "The question is if this is the catalyst that will break us to the downside or if we'll go back into the range."

Other major indexes also tumbled. The Dow Jones Industrial Average lost 358.04 points, or 2.1 percent, to 16,990.69, the lowest level since October. The Nasdaq 100 Index retreated 2.8 percent, with only four members advancing. The Chicago Board Options Exchange Volatility Index rose for a fourth day, heading for its biggest weekly gain of 2015.