Mylan responded Thursday by expanding existing programs to boost access to its EpiPen Auto-Injector for patients who have high out-of-pocket costs. The company is reducing the cost through the use of a savings card which will cover up to $300 for the EpiPen 2-Pak, and taking other stops. Mylan shares were more than 3 percent higher in early trading.

Mylan has been under fire for the dramatic price hikes in EpiPens, livesaving devices for people with severe allergies. Prices have gone from $100 in 2008 to more than $600 for some customers.

Fed watching should continue Thursday, as traders digest durable goods and jobless claims data ahead of Friday's Jackson Hole speech by the Fed chair. But they will also be licking their wounds after Democrat Clinton punctured the health-care sector with one powerful tweet Wednesday afternoon. The IBB Nasdaq Biotech ETF fell 3.4 percent, after Clinton tweeted and issued a statement saying that there's no justification for the high prices Mylan is charging for EpiPens.

Stock traders have been watching out for Janet Yellen all week, but they were blindsided by Hillary Clinton .

"Hillary took the air out of that sector and that hit other momentum names," said Scott Redler, chief strategist at T3Live.com. It's not the first time. Last year, on Sept. 21, Clinton tweeted about price gouging, after revelations about astronomical price hikes by Martin Shkreli's Turing Pharmaceuticals. That sent the popular IBB biotech ETF down about 20 percent in just a few weeks last fall, and the IBB bottomed with a near 33 percent decline by February.

Redler said as IBB declined Wednesday, there were reflex moves in some momentum names, like Facebook, Alphabet and Amazon.com, though they were bid higher going into the close. "The down move in bios gave a little more conviction to sell them also and get out of the way. They're not broken, but they're bending," said Redler.

Stocks closed lower with the S&P health-care sector down more than 1.5 percent, its worst performance since June 24. The was down 11 at 2,175. "The S&P closed right at the 21-day moving average. This time it feels like there was a lot more damage to momentum stocks," said Redler, who follows short-term technicals.

Stock futures were lower Thursday morning.

"It was a textbook outside day in bios, which puts it back in the bearish camp," Redler said of Wednesday's trading.

"Finally the bears have a perfect formula to flex their muscles," he said, adding any pullback could be shallow. "Now the market looks faulty versus constructive … (on the S&P) 2,134, the old resistance level could be support."

Markets have been meandering on light volume this week as traders speculate about whether Fed Chair Yellen will give any clues on rate hikes in her much anticipated speech Friday. Bond yields have been locked in a range for weeks, with traders saying the breakout could come when Yellen speaks at the annual Jackson Hole symposium.

Another point of focus for stocks will be energy Thursday, after West Texas Intermediate oil futures fell about 2.8 percent to $46.77 per barrel on a build in U.S. supply.

"We're kind of leaking out a little bit. Oil moved up 9 percent last week on OPEC and the prayer that Saudi Arabia would just do something on production in September," said Art Hogan, chief market strategist at Wunderlich Securities. "When that energy complex sells off, it does correlate on the downside. Now investors are as afraid of Janet Yellen saying something egregiously hawkish as can the S&P trade at 17 times in a 1.5 to 2 percent GDP growth environment."

Redler said the sell-off in gold and the gold miners Wednesday suggested that investors might be thinking that Yellen will be hawkish.

Besides durable goods and jobless claims at 8:30 a.m. EDT, there is Markit Services PMI at 9:45 a.m. Earnings are expected from Medtronic, Tiffany, Dollar General, Toronto-Dominion, Dollar Tree, Michaels Cos, Movado, Burlington Stores and Canadian Imperial Bank, before the open. After the closing bell, reports are expected from GameStop, Autodesk, Pure Storage, Splunk and Ulta Salon.