STORY: U.S. stocks fell on Wednesday amid further gains in Treasury yields and concern over the timing and scale of possible interest rate cuts from the Federal Reserve.

The Dow dropped to its lowest level in nearly a month and closed down more than 1%, the S&P 500 shed nearly three-quarters of a percent and the Nasdaq lost almost six-tenths of a percent.

The yield on the benchmark 10-year U.S. Treasury note hit four-week highs at 4.6%, extending Tuesday's gains, after weak debt auctions.

Conflicting expectations on the size and the timing of potential interest rate cuts have kept the market on edge since the start of this year.

The main focus this week will be on Friday's release of April's Personal Consumption Expenditure data, the Fed's preferred inflation gauge, says George Cipolloni, portfolio manager at Penn Mutual Asset Management.

"The PCE peaked out at around 6% and had fallen all the way down to 2%, which was great. And now it's resurged a little bit here, and it's back up in the expectations around 3.7%. So, we would definitely not want to see a much stronger number than that in terms of the PCE, because as we've seen today already, the Treasury market has been weak and we wouldn't want to see it much weaker or rates much higher from here."

In company news, shares of Salesforce - which closed up more than half a percent - plummeted roughly 17% in after-hours trading after the business software company forecast second-quarter revenue below Wall Street expectations as customers lower spending on its cloud and enterprise business products.

Shares of Marathon Oil gained almost 8.5% after ConocoPhillips said it would buy the company in an all-stock deal for a little over its $15 billion market value. Conoco slipped more than 3%.

Airline stocks fell, led by American Airlines, down 13.5%, after the company cut its second-quarter profit forecast.

And Abercrombie & Fitch shot up more than 24% after the retailer raised its annual sales growth forecast.