U.S. stocks struggled on Wednesday as turbulence at Credit Suisse renewed fears of a banking crisis.

The Dow Jones Industrial Average fell 280.83 points, or 0.87 percent, to close at 31,874.57. The S&P 500 sank 27.36 points, or 0.7 percent, to 3,891.93. The Nasdaq Composite Index increased 5.9 points, or 0.05 percent, to 11,434.05.

Six of the 11 primary S&P 500 sectors ended in red, with energy and materials down 5.42 percent and 3.28 percent, respectively, leading the laggards. Financials dipped 2.84 percent, the third worst-performing group. Communication services rose 1.5 percent, the best-performing group.

Wall Street's three major indexes suffered steep losses earlier in the day, which saw the Dow slump more than 700 points at its session lows, after news that the Saudi National Bank, a top shareholder of Credit Suisse, said it would not make further investments in the firm.

Shares of the embattled Swiss bank plunged on Wednesday with Swiss-listed Credit Suisse shares closing down more than 20 percent, while the U.S.-traded American depositary receipts of Credit Suisse sank about 14 percent.

The turmoil resurfaced on Wall Street, where investors were already anxious over the collapse of several U.S. regional banks.

The Cboe Volatility Index, widely considered as the best fear gauge in the stock market, spiked 10.16 percent to 26.14.

U.S. equities reclaimed some ground in afternoon trading following an announcement from Swiss regulators that the country's central bank would provide Credit Suisse with liquidity if necessary.

A crisis of confidence has arisen recently in the banking industry negatively impacting the sector and sparking broader market fears.

In the aftermath of last week's collapse of Silicon Valley Bank, markets grew concerned about bank solvency, bank liquidity, and bank profitability, especially in the backdrop of rapid monetary policy tightening.

"We believe fears about bank solvency are overdone," "but funding conditions, if they remain tight, will pose a challenge for a small number of individual banks, and sector profitability faces headwinds more broadly," UBS analysts said in a note Wednesday.

Experts noted that fears of further problem in the banking sector look set to remain a headwind for market sentiment for some time to come.

"Against a challenging market backdrop, we like high-quality fixed income and favor emerging market stocks over U.S. stocks," said UBS analysts.

Wall Street also parsed a slew of key economic data to assess the shape of the economy.

The U.S. Labor Department reported Wednesday that the U.S. producer price index decreased 0.1 percent in February, as against market expectations of an increase of 0.3 percent.

A separate report by the U.S. Commerce Department showed that U.S. retail sales contracted by 0.4 percent last month.

"These two reports gave no conclusive signals whether the economy is overheating enough to warrant a 25 basis point hike next week, or whether simmering economic activity will allow the Fed to leave rates unchanged," said Chris Low and Will Compernolle, analysts at FHN Financial.

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