(Updates with index/price moves and geopolitical news from the first paragraph.)

US equity indexes slipped while most government bond yields edged up after the Federal Reserve's preferred inflation gauge swung higher in July.

The Dow Jones Industrial Average fell 0.2% to 53,463.88, the S&P 500 edged less than 0.1% lower to 7,675.70, and the Nasdaq Composite declined less than 0.1% to 26,130.20. Industrials topped gainers while health, communication services and consumer discretionary led decliners.

The headline personal consumption expenditure price index rose 0.2%, following a 0.1% slide in June, the Bureau of Economic Analysis reported Wednesday. That's above the consensus for a 0.1% gain in a Bloomberg-compiled survey, keeping the annual headline rate at 3.7%, which also exceeded the expected 3.6% print. The Fed's preferred core measure, which excludes food and energy, climbed 0.2% in July, as expected. That's faster than the June print of 0.1%. The annual core gauge held steady at 3.3%, as projected.

Most US Treasury yields rose, with the 10-year yield up one basis point to 4.65%.

The probability of the Federal Reserve extending its policy pause to December stood at 27% late Wednesday, according to the FedWatch tool, almost unchanged from a day ago. Currently, there is a 45% chance of interest rates moving up by 25 basis points to a 3.75% to 4% target rate by December and a 24% likelihood of the fed funds rate being raised by 50 basis points to 4% to 4.25% by the end of this year.

On Tuesday, Boston Fed President Susan Collins said the central bank may have to tighten its monetary policy soon, unless inflation continues to cool.

US gross domestic product rose 1.5% in Q2, unrevised from the advance estimate released last month, as expected in a survey compiled by Bloomberg. GDP climbed 2.1% in Q1. New orders for US durable goods advanced 1.1% in July, up from 0.5% in June, versus expectations for 0.5% in a survey compiled by Bloomberg.

In geopolitical news, the Iranian military said it reached a revenue-sharing deal with Oman on the Strait of Hormuz, Bloomberg reported. "Agreements have been reached regarding each country's share of the strait's waters as well as Iran and Oman's share of its revenues," Bloomberg cited the Islamic Revolutionary Guard Corps' spokesman Hossein Mohebbi on the state-run Sepah News agency.

However, Reuters cited the IRGC as saying the strait would not open unless the US met Tehran's conditions under an interim ceasefire agreement that was struck in June before unravelling. Those conditions include an end to the US blockade on Iranian ports, compensation and removal of sanctions, the news outlet said.

"We have our own tools, and we also know the game," Iran's Economy Minister Ali Madanizadeh said while referring to Tehran's experience circumventing US sanctions, according to a report from Al Jazeera, a Middle Eastern broadcaster. Tehran could potentially "go on the offensive" and was confident that many countries would effectively reject US President Donald Trump's threats to cut off all links with Iran, he added.

The front-month US West Texas Intermediate crude oil contract retreated 0.7% to $81.82 per barrel, and global benchmark North Sea Brent declined 1.4% to $87.38 per barrel.

In company news, Truist downgraded Nike (NKE) to hold from buy while adjusting its price target to $42 from $47. Shares of the sports footwear and apparel retailer were down 2.3%.

Meta Platforms (META) has agreed to pay up to $16.68 billion to resolve claims brought by several US states that the tech giant used its platforms to "ensnare" youth and teens, according to a federal court filing.