US stocks were lower on Wednesday as investors held off from making big bets ahead of the release of the minutes of the Federal Reserve's July policy meeting. The Fed left interest rates unchanged at its meeting last month but said near-term risks to the economy had diminished, leaving the door open for a possible rate hike this year.
Investors will parse the minutes, due at 2:00 pm ET (1800 GMT), for hints on when the Fed would next raise rates, particularly in light of New York Fed President William Dudley's hawkish comments on Tuesday. Dudley, a permanent voting member and a close ally of Fed Chair Janet Yellen, said a rate hike as soon as September was possible given evidence of wage gains and a tighter labour market.
"Investors seem guarded today," said Eric Wiegand, senior portfolio manager at the Private Client Reserve at US Bank. Traders see an 18 percent chance of a hike in September, up from 9 percent before Dudley's Tuesday comments, while the bets jumped to 45.5 percent from 37.4 percent for December, according to the CME Group's FedWatch tool.
Poor results from big retailers Target and Lowe's also hurt investor sentiment. Shares of both the companies were down about 6.5 percent after they cut full-year earnings forecasts. The stocks were chiefly responsible for the 0.62 percent decline in the S&P 500's consumer discretionary index. At 13:06 pm ET (1706 GMT), the Dow Jones industrial average was down 22.29 points, or 0.12 percent, at 18,529.73, the S&P 500 was down 2.5 points, or 0.11 percent, at 2,175.65 and the Nasdaq Composite index was down 7.86 points, or 0.15 percent, at 5,219.25.
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