"We'll be looking for signs that Fed officials were looking for incoming data to continue its improved trend as a sine qua non to any rate hike in December," Christopher Vecchio, currency analyst at DailyFX, wrote in a note.
Three Fed officials backed a rate hike sooner than later in separate speeches Wednesday morning. Atlanta Fed President Dennis Lockhart, a voting member on the Fed's policy committee, said that international market volatility has calmed since the October meeting and that continued improvement in the labor market supported a rate hike.
Separately, Cleveland Fed Present Loretta Mester said that a small rate hike at the next meeting would not harm the economy, while Richmond Fed President Jeffrey Lacker also said he backed an interest rate move.
The housing market showed a rare sign of weakness in October after construction on new U.S. homes slid 11% to an annual rate of 1.06 million, according to the Commerce Department. The drop marked the lowest level of housing starts since early spring. Economists had expected starts to drop to 1.15 million. However, permits for new construction climbed 4.1% to 1.15 million, signaling that demand will pick up in coming months.
International markets were mixed after a terrorist raid in Paris Wednesday stoked fears over international stability. French police arrested seven people overnight in an apartment raid in Paris that resulted in two deaths, both of which were suspected terrorists. The raid had targeted the Belgian man suspected of masterminding the terrorist attacks on Friday which killed more than 100 people.
In Europe, Germany's DAX added 0.04%, the CAC 40 in France tumbled 0.5%, and the FTSE 100 in London was flat. In Asia, the Shanghai Composite closed 1% lower and the Hang Seng in Hong Kong dropped 0.34%.
Target ( TGT - Get Report) shares fell 3% despite the retailer reporting its fourth straight quarter of traffic growth. The company earned an adjusted 86 cents a share, in line with estimates, while overall sales jumped 2.1% to $17.61 billion.
ON Semiconductor (ON - Get Report) was more than 7% lower after agreeing to buy Fairchild Semiconductor (FCS) in an all-cash deal worth $2.4 billion. The deal values Fairchild at a 41% premium to its price in mid-October, before reports of acquisition interest. Fairchild shares spiked 8%.
Norfolk Southern ( NSC - Get Report) climbed more than 4% after agreeing to "carefully evaluate" Canadian Pacific Railway's ( CP - Get Report) $28.4 billion bid. Norfolk Southern warned that a deal would face intense regulatory scrutiny.
Wells Fargo (WFC - Get Report) appointed Timothy Sloan as its new president and chief operating officer, likely positioning him as the bank's next CEO. Current CEO John Stumpf will need to retire from his position once he turns 65 in 2018, as per company rules. Sloan will continue in his position as head of wholesale banking.
Lowe's ( LOW - Get Report) climbed 1% after beating analysts' quarterly estimates on its top- and bottom-lines. The home-improvement chain also reaffirmed its full-year outlook of sales growth between 4.5% and 5% with comparable-store sales up at least 4%.
Staples (SPLS) added 0.7% after a disappointing third quarter, including a sales decline of more than 6%. The company said North American offline and online sales tumbled nearly 8%, while comparable-store sales slid 2%.
Mobile payments processing company Square is set to price its IPO later Wednesday in a closely watched float. The company, run by Twitter (TWTR - Get Report) CEO Jack Dorsey, is one of the few private companies valued at $1 billion or more. Square previously set its IPO price range between $11 and $13 a share, valuing the company at up to $4.2 billion. Trading on the New York Stock Exchange is scheduled for Thursday.