U.S. stocks fell on Wednesday with a gloomy first-half of the year approaching its end, marred by concerns of an aggressive monetary policy that risks pushing the economy into a recession.

Investors fretted over the impact of hefty rate increases on the U.S. economy, as data showed the GDP contracted in the first quarter amid a record trade deficit, following a Tuesday report that showed consumer confidence hit a 16-month low.

With just one more day to end the second quarter, the benchmark S&P 500 was on track for its biggest drop in the first half of a year since 1970, while the Nasdaq Composite looked set for a record slide over the same period.

Investors are now bracing for the latter part of the year, anticipating the impact of rising prices, higher yields and a hawkish Federal Reserve on the economy at large, as well as on second-quarter company earnings.

"There are concerns that we're ahead of ourselves in terms of earnings estimates in the second quarter," said Art Hogan, chief market strategist at National Securities Corp.

"This will play out in the second half of this year but we won't know that for two weeks and therefore investors and markets react to every data point, whether it's really important or not."

Federal Reserve chair Jerome Powell said there was a risk that interest rate increases will slow the economy too much, but persistent inflation was the bigger worry.

Cleveland Federal Reserve Bank President Loretta Mester advocated for another 75 basis points (bps) interest rate hike in the U.S. central bank's July meeting, if economic conditions remained the same.

San Francisco Fed President Mary Daly and New York Fed President John Williams also backed further rapid interest rate hikes on Tuesday and pushed back against fears that sharply higher borrowing costs will trigger a steep downturn.

BofA Global Research warned the chip industry was in for a downturn, pushing the Philadelphia SE Semiconductor index down 2.6%.

The brokerage upgraded Goldman Sachs Group Inc to "buy" from "neutral", saying it was well-positioned to outperform in a likely worsening economic environment, sending the investment bank's shares up 1.2%.

At 12:24 p.m. ET the Dow Jones Industrial Average was down 9.94 points, or 0.03%, at 30,937.05, the S&P 500 was down 16.26 points, or 0.43%, at 3,805.29 and the Nasdaq Composite was down 57.33 points, or 0.51%, at 11,124.21.

General Mills Inc gained 5.9% after the Cheerios maker's sales surpassed estimates despite higher prices.

Bed Bath & Beyond Inc plunged 20.6% after the home goods retailer reported a drop in quarterly comparable sales and said its CEO, Mark Tritton, had stepped down.

Declining issues outnumbered advancers for a 2.70-to-1 ratio on the NYSE and for a 2.70-to-1 ratio on the Nasdaq. The S&P index recorded one new 52-week high and 36 new lows, while the Nasdaq recorded nine new highs and 231 new lows.