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U.S. stocks cautious ahead of Fed minutes; oil stumbles post inventories

Published 05/18/2016, 11:22 AM
© Reuters.  Wall Street registers slight gains while waiting for clues on future Fed rate hikes
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Investing.com – Wall Street registered slight gains on Wednesday as investors looked ahead to the publication of the meeting minutes for the Federal Reserve’s (Fed) April 27 policy decision meeting and while market participants digested mixed weekly crude inventory data.

At 15:18GMT, or 11:18AM ET, the Dow Jones gained 3 points, or 0.02%, while the S&P 500 inched up 2 points, or 0.09%, while the tech-heavy Nasdaq Composite traded up 22 points, or 0.47%.

Even though the Fed minutes will be “old news”, having taken place on April 27 and with more recent remarks out from the policymakers themselves, markets want to gauge the details of the discussions that took place to see if the document might show less concern over the global economy or the uncertainty surrounding the global impact of the U.K.’s June 23 referendum on its membership in the European Union.

Several Fed officials made hawkish remarks on Tuesday that, along with inflation data rising at the fastest pace in more than three years and solid reports on industrial production and housing starts, tumbled the Dow Jones and spiked the dollar.

The odds of a rate hike in June increased to 19% on Wednesday, even though the CME Group data showed that most bets were for more tightening to be delayed until the September meeting. The Fed fund futures showed approximately a 38% chance of rate hikes happening this year.

The greenback hit a three-and-a-half week high on Wednesday though it pared gains later in the session as the minutes approached. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.18% at 94.72, at 15:21GMT or 15:21ET.

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Meanwhile, oil prices registered choppy trade on Wednesday after mixed data from the weekly U.S. Energy Information Administration inventory report.

Though crude stockpiles registered an unexpected build, both gasoline inventories and distillate stocks declined much more than expected.

After trading near session highs before the release, U.S. crude futures gained 0.08% to $48.35 a barrel by 15:20GMT, or 11:20AM ET, and Brent oil advanced 0.20% to $49.38.

In company news, Target Corporation (NYSE:TGT) tanked close to 8% after the second largest U.S. retailer reported first quarter earnings that included a smaller than expected increase in comparable sales.

However, home improvement retailer Lowe’s Companies Inc (NYSE:LOW) gained more than 2% on better-than-expected earnings and an increased profit guidance3

Cisco Systems Inc (NASDAQ:CSCO), Salesforce.com (NYSE:CRM), Urban Outfitters (NASDAQ:URBN) and L Brands (NYSE:LB) will post numbers after Wall Street closes.

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