Stocks continued to slide on Wednesday as Wall Street's recent rally begins to cool in the new year. The Dow Jones Industrial Average dropped nearly 285 points, while the S&P 500 Index and Nasdaq Composite lost roughly 0.8% and 1.2%, respectively.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY  ): -0.80% or -38.02 points to 4,704.81

Dow Jones Industrial Average (DIA  ): -0.76% or -284.85 points to 37,430.19

Nasdaq Composite Index (QQQ  ): -1.18% or -173.73 points to 14,592.21

In the spotlight, minutes from the Federal Reserve's December policy meeting showed that the central bank sees its current high interest rate policy as appropriate to support the U.S. economy.

"In their submitted projections, almost all participants indicated that, reflecting the improvements in their inflation outlooks, their baseline projections implied that a lower target range for the federal funds rate would be appropriate by the end of 2024," the document stated.

"Participants generally stressed the importance of maintaining a careful and data-dependent approach to making monetary policy decisions and reaffirmed that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably toward the Committee's objective," the minutes added.

Also making headlines, Apple (AAPL  ) shares fell for a second day on Wednesday following its biggest one-day decline since September after Barclays downgraded the stock to Underweight and reduced its price target from $161 to $160 on Tuesday.

On Wednesday, Bernstein analyst Toni Sacconaghi said in a note to clients that Apple remains at a high valuation, but has 'limited risk' of a deep sell-off.

"We see risk-reward as relatively neutral to slightly negative, given that the company's valuation remains elevated vs. peers and history, we are below consensus on FY 24 revenues and believe the company will likely struggle to grow in FY 24 amid a muted iPhone cycle - that said, we see limited risk of a major de-rating," Sacconaghi wrote.

Activist investor ValueAct Capital agreed to back Disney's (DIS  ) board, with Chief Information Officer Mason Morfit saying in a statement: "As legacy technologies transition to digital platforms, we believe Disney can lead the media industry forward."

Also in the news, Bank of America analyst Robert Cheng wrote in a Tuesday note that the rising artificial intelligence market is different from similar short-lived market themes like the Internet bubble of the 1999s or the Virtual Reality/Metaverse bubble of the 2020s.

"We believe AI is different because the key players are global CSPs [cloud service providers] and enterprises, vs. mostly start-ups focusing on consumer market during the Internet and the VR bubbles," Cheng wrote in a note late Tuesday. "CSPs/enterprises invest AI-related capex to enhance/create business models and increase sales/efficiency."

In economic news, the Labor Department's Job Openings and Labor turnover Survey showed employment listings at 8.79 million, coming roughly in-line with estimates on Wednesday. Separately, the ISM Manufacturing report released Wednesday showed a reading of 47.4 for December, coming in above November's reading of 46.7. Still, readings below 50 represent contraction in a sector.

In single-stock news, Xerox (XRX  ) announced Wednesday that it plans to cut 15% of its workforce as part of a broader effort to restructure its business. The layoffs are set to occur during the first-quarter.

″The shift to a business unit operating model is a continuation of our client-focused, balanced execution priorities and is designed to accelerate product and services, go-to-market, and corporate functions' operating efficiencies across all geographies we serve," Xerox CEO Steven Bandrowczak said in a release.

Looking ahead, market participants will react to the ADP's employment report for December, which is expected to show 130,000 private payroll additions.