NASDAQ 100, Dow Jones, S&P 500 News: Markets Brace for Fed Minutes Amid Earnings Buzz

Highlights

• July Fed minutes might unveil strategies behind high rate hikes.
• Target’s stock rises 5%, even after a yearly outlook cut.
• Major stock indexes predicted to close August with declines.

Wall Street Awaits Key Fed Insights Amid Housing and Corporate Buzz

US stock markets opened mixed, with investors anxiously awaiting insights from the Federal Reserve’s July meeting minutes, which could dictate the future trajectory of the financial markets. As August continues its downward trend, the Street’s attention oscillates between the Fed’s stance, housing starts, and corporate earnings.

At 13:33 GMT, the blue chip Dow Jones Industrial Average is at 34962.82, up 16.43 or +0.05%. The benchmark S&P 500 Index is trading 4434.38, down 3.48 or -0.98% and the tech-heavy Nasdaq Composite is at 13575.19, down 55.85 or -0.41%.

Federal Reserve’s Anticipation

The much-anticipated July minutes from the Federal Reserve, set to release at 18:00 GMT, have traders on edge. In the said meeting, rates were raised to the highest levels in over two decades. Insights into the Fed’s perspective on the spring’s regional banking crisis, policy tightening, and balance sheet adjustments could influence market movements. With Chairman Powell indicating a balance sheet reduction amid rate cuts, the minutes could provide clarity on the Fed’s strategy. The Federal Open Markets Committee’s next official gathering is set for September 19th.

Housing Sector Performance

July witnessed a 3.9% month-over-month surge in housing starts, totaling 1.45 million, slightly edging out StreetAccount’s consensus of 1.44 million. While building permits reflected a meager 0.1% rise from June to reach 1.44 million, it’s worth noting a 13% drop from the previous year, indicating mixed sentiments in the housing sector.

Corporate Earnings Update

The corporate earnings season is in full swing. H&R Block and Mediterranean eatery, Cava, saw stock rises of 6.1% and 8.6% respectively, following better-than-anticipated quarterly results. Despite slashing its yearly outlook, retailer Target experienced a 5% stock bump. In contrast, financial giants like JPMorgan Chase, Wells Fargo, and Bank of America are under the microscope, especially after Fitch hinted at potential credit rating downgrades. This follows Moody’s decision to lower the ratings of ten banks last week.

Short-Term Forecast

With August nearing its close, the stock market might continue its slump. Projections suggest declines for the three major indexes: Nasdaq Composite (5%), S&P 500 (3.3%), and the Dow (1.7%). While housing starts and certain corporate earnings paint an optimistic picture, the looming Fed’s announcement and the banking sector’s challenges suggest a cautious approach in the near term.