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U.S. stocks show caution ahead of Fed minutes; oil sinks 3%

Published 07/05/2017, 11:17 AM
© Reuters.  Wall Street trades flat though tech rises ahead of Fed minutes
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Investing.com – Wall Street traded mixed on Wednesday as investors returned from the Independence Day holiday and looked ahead to the release of the Federal Reserve's (Fed) latest meeting minutes, with gains in tech offset by losses in energy stocks as oil tumbled 3%.

At 11:11AM ET (15:11GMT), the Dow Jones dropped 12 points, or 0.05%, the S&P 500 rose 1 point, or 0.05%, while the Nasdaq Composite gained 29 points, or 0.47%.

The Fed will release minutes of its most recent policy meeting at 2:00PM ET (18:00GMT), as investors search for more clues on how committed the central bank is to hiking rates again this year. They are also looking for any detail on plans to wind back the Fed's massive balance sheet.

Despite the Fed's relatively hawkish message, market players remained doubtful over the central bank's ability to raise rates as much as it would like in the coming months due to softening inflation, although the odds for an increase in December have recently just crept past the 50% threshold, according to Investing.com’s Fed Rate Monitor Tool.

Earlier in the session, factory orders disappointed with a larger-than-expected decline in May, causing concern over the manufacturing sector that represents about 12% of the U.S. economy.

Meanwhile, oil tumbled more than 3% after Russia ruled out any proposals to deepen the OPEC-led production cuts.

Russia wants to continue with the current deal and any further supply curbs would send the wrong message to the market, according to government officials.

Traders didn’t hesitate to sell off on the news after what had been an eight-day rally in the commodity, while energy stocks suffered. Exxon Mobil (NYSE:XOM) led the Dow lower with losses of around 1.5% and Chevron (NYSE:CVX) was also off by more than 1%.

U.S. crude futures tumbled 3.40% to $45.47 by 11:17AM ET (15:17GMT), while Brent oil sank 2.90% to $48.17.

In company news, shares in Tesla (NASDAQ:TSLA) sank more than 4% as Goldman Sachs cut its six-month price target for the automaker to $180 from $190, a 49% downgrade from Monday's close.

Vantiv Inc (NYSE:VNTV) traded down 3% after the U.S. credit card processing firm announced the acquisition of the U.K.'s largest payment processing firm Worldpay Group PLC (LON:WPG) in a cash and stock deal worth £7.7 billion ($9.9 billion).

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