S&P 500; US Indexes Fundamental Daily Forecast – Investors Want Fed Minutes to Provide Clarity About Inflation, Rate Hike

The three major U.S. stock indexes are up slightly at the mid-session on Wednesday. Volume is light and volatility is low ahead of the release of the Fed monetary policy minutes meeting at 1400 GMT.

The Dow Jones Industrial Average is being led higher by a strong performance in Johnson & Johnson. The real estate sector is underpinning the S&P 500 Index.

At its meeting in September, the Fed kept interest rates unchanged, but said it would start to trim its massive $4.5 trillion balance sheet in October.

The minutes are likely to show that Fed policymakers discussed inflation. What investors want to see in the minutes is the hawkish policymakers build their case for a rate hike even though inflation keeps falling short of the Fed’s target. This would provide certainty for investors and this could support an extension of the rally.

Stock investors don’t like uncertainty so the Fed minutes are going to have to show that policymakers believe with clarity and conviction that a rate hike in December is necessary.