STORY: Wall Street ended slightly lower on Tuesday after data showed U.S. business activity contracted for a second straight month in August.

The Dow fell roughly half a percent. The S&P 500 ended down fractionally, while the Nasdaq finished flat.

Traders are split between expecting a 50-basis-point hike and a 75-basis-point hike, as they anxiously awaited Friday's central bank gathering in Jackson Hole, Wyoming.

While some thought Tuesday's weak economic data could suggest the Fed may not be as aggressive in raising interest rates, Jay Hatfield, CEO of Infrastructure Capital Management, wasn't as hopeful.

"Today the market is stabilizing after having sold off hard on both Friday and Monday... Now we’re just really waiting for, so, the market's relatively stable, waiting for Jackson Hole on Friday to get the latest commentary from Chair Powell... We believe the Fed will do 50, although, clearly, we have low confidence in the Fed. We think they're being too hawkish. The money supply, which is the best leading indicator of both inflation and the economy and stock market, is down 15% this year alone. But the Fed tends to ignore the money supply and just focus on the labor market. So, we think that there's definitely a risk they could do 75."

Shares of Zoom Video Communications tumbled 16.5% after the former "stay-at-home" stock darling cut its annual profit and revenue forecasts.

Shares of Macy's rose nearly 3.5% after the retailer beat quarterly profit estimates, while Palo Alto Networks surged 12% after the cybersecurity firm posted upbeat quarterly results and announced a stock split plan.

Shares of Twitter dropped more than 7% after news of a whistleblower complaint filed by the company's former security chief alleged that federal regulators were misled about its defenses against hackers and spam accounts.

Meanwhile, shares of Tesla rose more than 2% as CEO Elon Musk gears up for a battle in court with Twitter, after the world's richest person attempted to pull out of his deal to buy the company, citing Twitter's failure to provide details about bot and spam accounts.