Stocks fell lower on Wednesday as U.S. lawmakers continued debt-ceiling talks as the potential deadline looms ahead, with many market participants fearing a heighten chance of a national default.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY  ): -0.73% or -30.34 points to 4,115.24

Dow Jones Industrial Average (DIA  ): -0.77% or -255.59 points to 32,799.92

Nasdaq Composite Index (QQQ  ): -0.61% or -76.08 points to 12,484.16

U.S. debt-ceiling discussions stretched on for another day on Wednesday, with House Speaker Kevin McCarthy telling reporters that lawmakers are still at odds over future spending. Some analysts believe that the congressional lawmakers will end up voting on a deal next week, just ahead of the June deadline proposed by U.S. Treasury Secretary Janet Yellen.

"We're not going to default," McCarthy told reporters at a press conference Wednesday. "We're going to solve this problem. I will stay with it until we can get it done. But let's be honest about this. We had to spend less than we spent last year. It is not my fault that the Democrats cannot give up on their spending."

Market participants also reacted to minutes from the Federal Reserve's latest meeting released Wednesday afternoon. The minutes showed that policymakers were divided on whether to increase interest rates from an 11th time at their upcoming meeting in June.

"Participants generally expressed uncertainty about how much more policy tightening may be appropriate," the minutes stated. "Many participants focused on the need to retain optionality after this meeting."

The Fed now appears to be moving towards a data-dependent, multi-factor approach to determine its next moves, the minutes signaled, meaning decisions will be made based on upcoming economic data releases.

In single-stock moves, Kohl's (KSS  ) shares popped on Wednesday after the retailer reported a surprise quarterly profit and reaffirmed its guidance for the full year, expecting net sales to decline between 2% and 4%.

Citigroup (C  ) announced Wednesday it will spin off its Mexico business via an initial public offering. The bank says it plans to complete the separation of Banamex in the second half of 2024, and an IPO will likely follow in 2025.

Jefferies analyst Casey Haire upgraded First Horizon (FHN  ) to Buy from Hold, citing that the regional bank is worth buying even as its merger with TD Bank was dissolved. The upgrade comes ahead of First Horizon's investor day next month.

"Though investor days rarely deliver as meaningful catalysts, we view FHN as unique as this will be the first time mgmt. provides guidance in 17 months post TD deal break," he said in a note to clients Wednesday.

Oppenheimer analyst Jason Helfstein wrote in a note Wednesday that Netflix (NFLX  ) should see a boost as password sharing regulations officially launch in the United States. Helfstein increased his price target by $35 to $450, implying an upside of 26.4% over Tuesday's close, while also reiterating his Outperform rating.

Looking ahead, market participants will still trade on news surround U.S. debt-ceiling negotiations.