On Wednesday, U.S. stocks opened lower as a decline in retail shares weighed before the release of minutes from the Federal Reserve’s April meeting. The Fed minutes, scheduled to be released Wednesday afternoon, at could give hints on the path of rate hikes. Dallas Fed President Robert Kaplan reported on Tuesday he will advocate for a hike in June or July. Two other Fed officials said they anticipate up to three increases this year. The central bank will meet on June 14-15 but probabilities of a rate increase in June are scarce. Traders see a 58% chance of a rate hike following the Fed’s November meeting, advancing up from 42% on Monday, according to the CME FedWatch Tool. “The market got jittery yesterday after comments from the Fed officials but what it’s really looking for is comments from Yellen,” stated Randy Frederick, managing director of trading and derivatives for Charles Schwab. “I think we could see two rate hikes but September and December are more likely rather than June.”
Data released on Tuesday for April displayed the largest increase in U.S. consumer prices in more than three years as oil prices and rent increase, while additional data showed housing starts and industrial production rallying strongly. The strong data and a recovery in oil prices to seven-month highs have ignited expectations that inflation will advance further. The Fed has a 2 percent inflation target.
On Wednesday morning, the Dow Jones industrial average fell 77.46 points, or 0.44%, at 17,452.52, the S&P 500 dropped 6.15 points, or 0.3%, at 2,041.06 and the Nasdaq Composite declined 4.13 points, or 0.09%, at 4,711.61.Nine of the 10 major S&P sectors declined, with the consumer staples index’s. SPLRCS 1.02 percent drop leading the decliners. Declining issues outnumbered advancing ones on the NYSE by 1,727 to 872. On the Nasdaq, 1,309 issues declined and 883 increased. Lastly, The S&P 500 index reported three new 52-week highs and five new lows, while the Nasdaq recorded four new highs and 23 new lows.