Wall Street's main indices have edged lower after a hotter-than-expected inflation report boosted bets of an interest rate hike this month while investors parsed more big bank earnings.
Data showed US consumer prices accelerated in September amid a surge in petrol costs, leading traders to bolster bets of a rate hike in October.
They are pricing in a 46 per cent chance of a quarter-point increase compared with a 21.6 per cent chance before the figures, according to LSEG-compiled data.
"It certainly increases the odds of the Federal Reserve raising rates at the October meeting but I believe they're not going to because we have never had two rate hikes within two months of midterm election," said Sam Stovall, chief investment strategist at CFRA Research.
Stovall said given the Fed had taken a hawkish stance on monetary policy, the data makes a December rate hike increasingly likely.
Markets also digested another round of bank earnings.
Bank of America was down 8.5 per cent after the lender's profit fell in the third quarter as it set aside $US1.2 billion ($A1.7 billion) to cover regulatory fines while Morgan Stanley dipped 3.4 per cent despite a rise in quarterly profit.
The S&P 500 banks index fell 2.4 per cent to its lowest level in over four months.
Asset manager BlackRock gained 2.0 per cent after reporting a jump in third-quarter profit, helped by higher fees from managing client funds.
In early trading on Wednesday, the Dow Jones Industrial Average fell 32.80 points, or 0.06 per cent, to 51,637.30, the S&P 500 lost 46.65 points, or 0.60 per cent, to 7,758.80 and the Nasdaq Composite lost 216.07 points, or 0.78 per cent, to 26,988.31.
Seven of the 11 major S&P 500 sectors declined.
Sectors considered traditionally defensive rose, with consumer staples and healthcare stocks up 0.9 per cent and 1.7 per cent respectively.
The S&P 500 technology index was trading at over two-week lows as chip stocks came under pressure again.
They lost ground on Tuesday after reports pointing to progress in chip design by China's CXMT fuelled competition concerns.
Shares of Intel and Micron fell 2.6 per cent and 1.0 per cent respectively while Nvidia slipped 1.7 per cent.
Most "Magnificent Seven" stocks declined, barring Alphabet and Apple, which rose 0.2 per cent and 0.9 per cent respectively.
Remarks from Richmond Fed president Tom Barkin and the Fed's Beige Book report on regional economic conditions are also due late in the day.
Oil prices edged higher on Wednesday, with Brent crude holding above the $US100-a-barrel mark after two vessels were struck in the Strait of Hormuz and Iranian officials told Reuters they were deploying new tactics to target ships.
Among individual movers, Liquidia jumped 28 per cent after the drug maker said it settled all six pending lawsuits with United Therapeutics, ensuring uninterrupted access to Yutrepia, a drug used to treat patients with a form of pulmonary hypertension.
Declining issues outnumbered advancers by a 5.57-to-1 ratio on the NYSE and by a 3.3-to-1 ratio on the Nasdaq.
The S&P 500 posted 11 new 52-week highs and 9 new lows while the Nasdaq Composite recorded 16 new highs and 309 new lows.