The S&P 500 futures changed little on Wednesday as investors waited for the Federal Reserve’s latest minutes to be released for insights into when the central bank might begin removing incentives. Investors also waded through more earnings results from major retailers Target and Lowe’s.
The futures on the S&P 500 were almost flat with a minus of 2.5 points. Dow Jones Industrial Average futures lost 55 points, or 0.2%, after running a 5-day winning streak on Tuesday. Nasdaq 100 futures were mostly flat.
The Federal Reserve will release its minutes of its July meeting at 2 p.m. ET. Market participants will be looking for clues as to when the central bank might withdraw its monthly bond buying program.
Since that July meeting, there has been growing support within the Fed to announce a cut in September and begin in October. The 10-year government bond yield rose slightly to 1.28% on the Wednesday before it was released.
Target shares retreated in early trading even after beating second-quarter gains. The retailer’s profit and sales exceeded expectations, and the company raised its forecast for the second half of the year with a good start to back-to-school spending. Target stocks are up 44% this year through Tuesday, so some investors may take profits.
Lowe’s shares rose more than 4% in pre-trading hours after last quarter earnings beat expectations with higher home improvement sales.
ViacomCBS stock rose roughly 3% in pre-trading hours after Wells Fargo upgraded the stock, saying it could rise more than 50% due to strong streaming growth and possible industry consolidation.
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On Tuesday, major averages fell after a drop in retail sales in July. The Dow lost 282 points, dragged down by a 4.3% decline in Home Depot stock.
The S&P 500 also lost 0.7% on its worst day since July 19. The Nasdaq Composite was the relative underperformer, down 0.9% as Facebook, Amazon, Apple and Google parent Alphabet all closed lower.
“The stock market is long overdue for a correction. Covid cases continue to mount, obscuring economic reopenings, consumer data has collapsed shockingly recently – including last Friday’s consumer confidence and retail sales and homeowner sentiment. ” [Tuesday] – Several stocks stop responding positively to good earnings, inflation reports stay hot and talks about a Federal Reserve throttling are everywhere, ”said Jim Paulsen, chief investment strategist at Leuthold Group.
The Census Bureau said Tuesday that retail sales fell 1.1% in June, largely due to a decline in auto sales. According to the Dow Jones consensus forecast, economists expected retail sales to decline 0.3% in July, compared to a revised 0.7% increase in June. Excluding cars, sales were down 0.4%, compared to estimates of 0.2%.
The small-cap benchmark Russell 2000 fell 1.2% on Tuesday.
Cisco Systems and Nvidia answer after the bell. The stock trading app Robinhood publishes its first earnings report as a public company on Wednesday after the bell.
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