U.S. stock futures fell Wednesday as investors warily returned from a holiday break, focusing on the release of the minutes of the last Federal Reserve meeting, looking for clues of future monetary policy.
By 06:50 ET (10:50 GMT), the Dow futures contract was down 135 points, or 0.4%, S&P 500 futures traded 18 points, or 0.4% lower, and Nasdaq 100 futures dropped 75 points, or 0.5%.
Wall Street was closed on Tuesday for the Fourth of July holiday, but ended higher on Monday, continuing the strong start to the year on a growing belief that the world’s largest economy can withstand the Fed’s aggressive year-long monetary tightening without falling into recession.
Fed minutes in focus
That said, investors are set to focus on the minutes from the Fed’s June policy meeting, due later in the session, with investors looking for more insight into the debate over what Fed Chair Jerome Powell has said is an increasingly even balance of risks between doing too little and going too far on policy tightening.
At their last gathering, the Federal Open Market Committee voted to keep borrowing costs steady at the existing target range of 5% to 5.25%. But policymakers signaled the possibility of two further rate hikes in 2023, likely including one at the Fed’s next meeting later this month.
May factory orders on data slate
The economic data slate centers around May U.S. factory orders data for more clues about the impact of higher interest rates on the economy after data on Monday showed U.S. manufacturing slumped in June.
Data released earlier in the day showed that China’s services activity expanded at the slowest pace in five months in June, while euro zone business activity slipped into contractionary territory last month.
Elsewhere, John Williams, president of the Federal Reserve Bank of New York, is scheduled to deliver remarks on Wednesday.
Tesla cuts Japanese car prices
In corporate news, Tesla Inc (NASDAQ:TSLA) cut prices in Japan of its Model 3 and Y electric vehicles by low single-digit percentages from the start of this month, it said on Wednesday.
United Parcel Service (NYSE:UPS) will also be in the spotlight after the Teamsters union, which represents roughly 340,000 workers at the parcel delivery firm, said the company’s management had “walked away” from negotiations over a new contract, raising the prospect of a strike.
Brent retreats ahead of API inventory data
Brent oil prices retreated Wednesday on renewed worries of a global economic slowdown weighed on market sentiment, overshadowing the news earlier this week of more supply cuts from a series of top producers.
The focus Wednesday will be on the release of the Fed minutes for further clues on the U.S. central bank’s outlook, as well as industry data on U.S. crude and product inventories from the American Petroleum Institute, a day later than usual.
By 06:50 ET, the Brent contract dropped 0.3% to $76.01, while U.S. crude futures traded 1.9% higher at $71.14 a barrel, having traded through a U.S. holiday to mark Independence Day without a settlement.
Additionally, gold futures rose 0.3% to $1,935.45/oz, while EUR/USD traded just higher at 1.0881.
