The Dow Jones industrial average dropped 185.46 points, or 1.2 percent, to close at 15,451.09 — 225 points below its all-time closing high reached Wednesday after the Fed's announcement.
All 10 industry groups in the S&P 500 fell, led lower by telecom companies and utilities. The S&P also fell on Thursday, making this its first two-day decline in almost three weeks.
Until now, September defied the worriers. The stock market has bounced backed from an August swoon, despite a calendar loaded with potential rally killers.
Summers, a former Treasury secretary, was viewed as being more likely to rein in the Fed's massive stimulus program, which has kept interest rates low and boosted corporate profits.
As Middle East strife recedes from investors' minds, though, fears of budget gridlock grow.
"Geopolitics ... is much lower on the list. It's not off the list" of investor worries, said David Darst, chief investment strategist for Morgan Stanley Wealth Management. "No. 1 becomes the debt ceiling and the federal spending debate."