The CNN Money Fear and Greed index showed a decline in the overall market sentiment, while the index remained in the "Extreme Fear" zone on Wednesday.

U.S. stocks settled lower on Wednesday, after recording gains earlier during the session.

On the economic data front, the Manheim Used Vehicle Value Index rose 2.8% month-over-month for July. Mortgage applications rose by 6.9% from the prior week in the period ending August 2.

Shares of NVIDIA Corporation (NASDAQ:NVDA) fell 5.1% on Wednesday, while Super Micro Computer (NASDAQ:SMCI) shares dipped over 20% after the company reported downbeat fiscal fourth-quarter earnings.

Shares of Tesla, Inc. (NASDAQ:TSLA) fell 4.4% during the session. Walt Disney Co (NYSE:DIS) shares fell 4.5% despite the company reporting better-than-expected fiscal third-quarter earnings.

Most sectors on the S&P 500 closed on a negative note, with consumer discretionary, materials, and information technology stocks recording the biggest losses on Wednesday. However, energy and utilities stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by around 234 points to 38,763.45 on Wednesday. The S&P 500 fell 0.77% to close at 5,199.50, while the Nasdaq Composite declined 1.05% to close at 16,195.81 during Wednesday's session.

Investors are awaiting earnings results from Eli Lilly and Company, US Foods Holding Corp., and Parker-Hannifin Corporation today.

What is CNN Business Fear & Greed Index?

At a current reading of 19.7, the index remained in the "Extreme Fear" zone on Wednesday, versus a prior reading of 23.6.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.