Market Update: Stocks Fall Lower Ahead of Key Inflation Reading

Stocks were lower Wednesday as continued worries over the U.S. banking sector and anticipation of another key inflation report weighed on market sentiment. The Dow Jones Industrial Average lost nearly 200 points, while the S&P 500 and Nasdaq Composite dropped 0.7% and 1.2%, respectively.

Here's how the market settled on Wednesday:

S&P 500 Index (NYSE: SPY): -0.70% or -31.67 points to 4,467.71

Dow Jones Industrial Average (NYSE: DIA): -0.54% or -191.13 points to 35,123.36

Nasdaq Composite Index (NASDAQ: QQQ): -1.17% or -162.31 points to 13,722.02

With July's inflation report set for release Thursday morning, market participants grew more concerned over the health of the U.S. economy in the wake of Moody's downgrade of midsize U.S. banks on Tuesday. Inflationary pressures and the status of the banking sector will both be part of the Federal Reserve's decision on interest rates.

Wall Street has slipped lower so far this month, with the Nasdaq losing more than 4% and slipping into negative territory for the third-quarter following Wednesday's decline. The S&P 500 and Dow are also down 2.6% and 1.2%, respectively, for August.

Making headlines during Wednesday's session, Disney's (NYSE: DIS) ESPN and PENN Entertainment (NASDAQ: PENN) announced a 10-year deal late Tuesday for PENN to rebrand its Barstool sportsbook to ESPN Bet. As part of the deal, PEEN will pay ESPN $2 billion in cash and stock warrants to license the sports news brand accross its 16-state network of mobile sportsbooks.

"With ESPN you're talking about a brand that everybody in the world knows about," PENN CEO Jay Snowden said on the company's earnings call on Wednesday. "It's not an old brand, It's not a young brand it's an everything brands. There's a lot of affinity for that brand. And so we think that's going to be extremely complementary to what we've built over the course of last three years."

Sports-betting competitor DraftKings (NASDAQ: DKNG) shares fell more than 10% Wednesday on the news.

WeWork (NYSE: WE) shares sank nearly 40% after the co-working space provider warned investors in a Securities and Exchange Commission (SEC) filing that it has "substantial doubt" in its ability to keep operating due to weaker-than-expected membership rates in its second-quarter. In the filing, WeWork warned of a potential bankruptcy, restructuring or refinancing of its debt.

Still, WeWork's interim CEO David Tolley offered an optimistic tone to investors following its $349 million loss during the quarter.

"The company's transformation continues at pace, with a laser focus on member retention and growth, doubling down on our real estate portfolio optimization efforts, and maintaining a disciplined approach to reducing operating costs," Tolley told investors.

Lyft (NASDAQ: LYFT) shares fell after the ride-hailing company reported it made less money per active rider in Q2, decreasing about 5% compared to Q1, and posted its slowest second-quarter revenue growth in two years. The company raised its Q3 revenue and ride-share volume growth outlook to a range of $1.13 billion and $1.15 billion and +20%, respectively, but issued disappointing Q4 estimates that show low- to mid-single digit increases.

Roblox (NASDAQ: RBLX) shares dropped after the company's second-quarter bookings -- the company's revenue figure -- fell below analyst expectations. The video-game company reported a loss of $0.46 per share on $781 million of bookings. Roblox added in its earnings report that it expects to see losses for the "foreseeable future."

Looking ahead, market participants will digest earnings from Disney (NYSE: DIS) and Wynn Resorts (NYSE: WYNN) after Wednesday's close. Thursday will also see the release of July's Consumer Price Index reading in the morning.