By Liz Moyer
Investing.com -- Stocks pushed ahead to record highs earlier Wednesday until minutes of the latest Fed meeting sucked the life out of the party.
While consumer spending rebounded strongly from the worst of the Covid-19 lockdowns this spring, the Fed acknowledged that businesses faced an uncertain outlook that could affect the pace of the recovery.
The S&P 500 surged above its previous intraday high, a day after closing at a record, but fell back after the Fed minutes were released. The broad market ended the day down 0.4%, while the Dow Jones Industrial Average fell 0.3% and NASDAQ Composite dropped 0.5%.
Retail earnings continue on Thursday with reports due out from BJ's Wholesale and Ross Stores. Apple became the first publicly traded American company to reach $2 trillion in market value ahead of its 4-for-1 stock split, and gold fell back below $2,000.
Here are three things that could affect the markets tomorrow.
1. More earnings reports from retailers
Analysts expect the warehouse chain BJ's Wholesale Club Holdings Inc (NYSE:BJ) to report profit of 57 cents a share on revenue of $3.7 billion, according to a survey by Investing.com. Ross Stores Inc (NASDAQ:ROST) is expected to report a loss of 28 cents a share on sales of $2.4 billion.
Retailers had mixed results on Wednesday. Target Corporation (NYSE:TGT) jumped after reporting its strongest second quarter ever, with profit soaring 80%, handily beating expectations. The home supply chain Lowe’s Companies Inc (NYSE:LOW) also had a strong quarter, beating expectations, though its stock did not react as favorably.
Meanwhile, TJX Companies Inc (NYSE:TJX) the parent of TJ Maxx and Marshall's discount stores, reported a worse-than-expected quarter.
2. Will Apple maintain its upward momentum?
Apple Inc (NASDAQ:AAPL) reached above a $2 trillion market cap briefly on Wednesday, the cherry on top of a remarkable 57% climb this year even with the pandemic.
It took the maker of iPhones and Mac laptops just two years to achieve what no other publicly-traded American company has. And it did so in a matter of months, roaring back from a 2020 low in March.
The pandemic made people more reliant than ever on their gadgets during lockdowns. And a plan to split the $462 stock 4-for-1 later this month may draw in new investors, pushing the stock even higher.
But the split isn't great news for the Dow index, which unlike other stock indexes, is weighted according to price. Right now, Apple is the most expensive of the 30 Dow components, meaning it has the most influence in the direction of the Dow. But after the split, which will result in a stock at roughly $115, Apple will be ranked below several others, including Goldman Sachs Group Inc (NYSE:GS), Microsoft Corporation (NASDAQ:MSFT) and Walmart Inc (NYSE:WMT).
3. Gold and the dollar act funny after Fed minutes
Gold Futures sank again on Wednesday as the dollar surged, seemingly in defiance of the Fed's comments on the economic recovery.
After soaring above $2,000 on Tuesday, the yellow metal dropped back to around $1,950, and the dollar surged 1% against other world currencies. The gain in the dollar, which has been under pressure in recent weeks, perplexed traders. The minutes of the Federal Reserve's July meeting spelled out some concerns about the progress of the recovery, especially since businesses are still struggling to come back.
The risks include the possibility of a new wave of virus spread that could cause credit markets to tighten again. Loss of pandemic support for households, businesses and local governments is also an issue, the Fed said. The minutes represent the Federal Open Market Committee's deliberations from the late-July policy meeting, when policymakers opted to keep rates near zero.