U.S. stocks fell on Wednesday, with investors spooked by the first diagnosis of Ebola in a patient in the United States, but the CBOE Volatility index .VIX pared back from earlier gains, suggesting further volatility may be limited.

The VIX, a measure of investor anxiety, rose as much as 7.6 percent on Wednesday, nearing its highest since April, before it shed most of those gains. It last traded up 2.3 percent at 16.69, still well below its long-term average of 20.

Donald Selkin, chief market strategist at National Securities in New York, said the VIX had found resistance near 17, continuing a trend seen in both April and August.

"That's important, because it suggests that when we get to 17, investors think the market is oversold. We could see a bounce, and already it looks like the market is off its lows of the day."

The S&P 500 fell as much as 0.9 percent before recovering modestly to fall 0.7 percent. The benchmark index remains less than 3 percent away from its all-time closing high, "a smaller decline than was seen in previous dips that took the VIX to 17," Selkin said.