“The market really is just digesting some consumer credit card debt issues that have come out yesterday”, said Gina Bolvin, president of Bolvin Wealth Management Group in Boston. “With price of oil going up, the consumer is the backbone of the economy. If they are too stretched and they stopped spending, that feeds us more into a recession narrative.”

On Tuesday, the New York Federal Reserve Bank said U.S. credit cards debt surpassed $1 trillion, and Philadelphia Fed President Patrick Harker said the U.S. central bank may be at the stage where it can leave interest rates unchanged.

On Monday, Fed Governor Michelle Bowman said further rate increases were likely, citing nagging inflation and strong economic growth.

Traders put the chance of no rate hike at the Fed's next policy meeting in September at 86.5%, according to CME FedWatch Tool. Rate-sensitive megacap growth and technology stocks, that have led the Wall Street rally, such as Nvidia, Apple and Tesla, were down between 1.7% and 5.0%.

The Consumer Price Index (CPI) for July, due Thursday, is expected to show a slight acceleration from last year. On a month-to-month basis, consumer prices are seen increasing 0.2%, the same as in June.

On Tuesday, Wall Street's main indexes ended lower in a broad selloff after credit rating agency Moody's downgraded several small and mid-sized banks. On Wednesday, big banks extended those losses with Bank of America down 0.8% and Wells Fargo down 1.3%.

China's consumer sector fell into deflation in July. The consumer price index (CPI) dropped in the world's second-largest economy, the National Bureau of Statistics said on Wednesday, its first decline since February 2021.

The Dow Jones Industrial Average fell 9.24 points, or 0.03%, to 35,305.25, the S&P 500 lost 7.26 points, or 0.16%, to 4,492.12 and the Nasdaq Composite dropped 80.04 points, or 0.58%, to 13,804.29.

Seven of the top 11 S&P 500 sectors rose, with energy stocks leading the gain by a 1.6% jump, touching a near six-month high, tracking a jump in crude oil prices.

Casino owner Penn Entertainment's shares surged 10.7% on a $2 billion deal with Walt Disney's ESPN to launch a sports betting business.

Walt Disney's shares fell 0.2%, erasing early gains ahead of its quarterly results due after the bell.

Lyft shares tumbled 8.7% despite a strong earnings forecast, as the company signaled it would double down on competitive pricing to catch up with rival Uber.

Of the 443 S&P 500 companies that have reported results as of Tuesday, 78.6% beat analyst expectations, according to Refinitiv data.

Advancing issues outnumbered declining ones on the NYSE by a 1.04-to-1 ratio; on Nasdaq, a 1.45-to-1 ratio favored decliners.

The S&P 500 posted 15 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 54 new highs and 160 new lows.