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(Reuters) -U.S. stock index futures were muted on Wednesday ahead of minutes from the Federal Reserve’s July policy meeting that could offer more cues on the path for interest rates, while shares of Target jumped on its upbeat quarterly showing.
Equities have been going through a rough patch in August, with the S&P 500 languishing at a more than one-month low as data underscoring sticky inflation and a robust economy has fanned fears of interest rates staying higher for longer.
Wall Street closed sharply lower on Tuesday after solid retail sales growth in July added to uncertainty around the interest rate outlook, with concerns over a possible downgrade of several U.S. lenders by Fitch further denting risk sentiment.
While investors largely expect the Fed’s monetary tightening to be nearing its end, worries linger the central bank could hold rates at the current level for longer.
Traders’ bets of a rate hike pause in September stand at nearly 91%, according to CME Group’s (NASDAQ:CME) Fedwatch tool.
Investors are now focused on the Federal Reserve’s July 25-26 meeting minutes, due at 1400 ET (1800 GMT), which may indicate how many policymakers feel the U.S. central bank is done raising interest rates.
The central bank had raised rates by 25 basis points at the end of the meeting.
“Recent commentary from several FOMC (Federal Open Market Committee) policymakers would appear to suggest growing splits between those who think that a lengthy pause is appropriate now, and those who want further tightening,” said Michael Hewson, chief market analyst at CMC Markets in a note.
Shares of Target jumped 7.2% in premarket trading after the big-box retailer’s second-quarter profit beat outweighed its annual forecast cut.
Bigger rival Walmart (NYSE:WMT), which is scheduled to report results on Thursday, rose nearly 1%.
Megacap growth stocks were mixed, with the yield on the two-year Treasury note, which best reflects short-term rate expectations easing to 4.9%.
Nvidia (NASDAQ:NVDA) edged up 0.8% after Piper Sandler became the latest Wall Street brokerage to raise its price target on the stock ahead of the chip designer’s earnings next week.
Tesla (NASDAQ:TSLA) slid 1.8% after the electric-car maker cut prices for its premium Model S and Model X cars in China by more than 6%.
Investors will also monitor data on industrial production and housing starts later in the day.
At 7:05 a.m. ET, Dow e-minis were down 4 points, or 0.01%, S&P 500 e-minis were down 2 points, or 0.04%, and Nasdaq 100 e-minis were down 6.75 points, or 0.04%.
Among other stocks, U.S.-listed shares of Tower Semiconductor (NASDAQ:TSEM) dropped 9.5% in premarket trading, after Intel (NASDAQ:INTC) terminated its plans to acquire the Israeli contract chipmaker.
Coinbase (NASDAQ:COIN) gained 5.4% as the crypto exchange secured regulatory approval to allow U.S. retail customers to trade crypto futures.
