The Dow Jones Industrial Average (DJIA) futures fell by 105 points, or 0.2%, on Wednesday morning. S&P 500 futures were down 0.3%, while Nasdaq 100 futures dropped 0.4%. The move followed a tech-driven selloff in the previous session that left the Nasdaq in negative territory, even as the Dow managed to close slightly higher.
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Investors are taking a cautious approach as they prepare for the release of the Fed’s latest meeting minutes later today. These minutes could give new insight into how central bankers are weighing interest-rate cuts, inflation, and the state of the labor market.
Fed Minutes Will Impact Market Expectations
Wall Street is betting on a quarter-point cut when the Fed meets again on September 17. However, the bigger question is what comes next. According to the CME FedWatch tool, traders are split on whether the Fed will cut another 0.25 percentage point, a deeper 0.5 percentage point, or stop after just one move.
Fed Chair Jerome Powell will also have a chance to set the tone on Friday when he speaks at the annual Jackson Hole symposium in Wyoming. His comments could clarify whether policymakers are leaning toward more aggressive action or a slower, step-by-step approach.
Big Retailers Report Earnings
Earnings season is also adding to the market’s cautious tone. Today, Target (TGT), TJX (TJX), and Lowe’s (LOW) are reporting results. Tomorrow, Walmart (WMT) and Ross Stores (ROST) are set to follow. Investors are watching closely to see how consumers are handling stubbornly high borrowing costs and shifting spending habits.
Home Depot (HD) already delivered its numbers earlier this week, maintaining its full-year guidance despite weaker quarterly sales. Management warned that high interest rates continue to discourage Americans from moving, which directly impacts demand for home improvement.
Global Tensions Lift Oil Prices
Beyond earnings and the Fed, geopolitical developments are keeping traders alert. Oil (CM:CL) prices ticked higher after Russia-Ukraine peace talks appeared to stall. President Donald Trump has been pushing to arrange a direct meeting between the two countries’ leaders, though details remain unclear.
West Texas Intermediate crude was up about 1% early Wednesday at $63 a barrel. Higher energy prices could complicate the Fed’s effort to tame inflation if they persist.
Bond Yields Slip ahead of Data
In the bond market, the 10-year Treasury yield edged down to 4.31% from 4.347% on Tuesday. The two-year yield was little changed at 3.769%. Lower yields suggest investors are seeking safer assets while waiting for clearer signals from the Fed.
In short, markets are moving lower today as investors wait for the Fed’s minutes and Powell’s speech later this week. Tech stocks are still under pressure, retailers’ earnings are in focus, and oil prices are climbing again. With all of these factors colliding, traders are holding back until they get a clearer picture of where interest rates are really headed.
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