U.S. equities and stock exchange traded funds bounced higher Wednesday as financial markets prep for the afternoon release of the latest Federal Reserve minutes.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA: SPY), iShares Core S&P 500 ETF (NYSEARCA: IVV) and Vanguard 500 Index (NYSEARCA: VOO), were 0.2% higher Wednesday.
A day after brick-and-mortar stores were among the worst performers, retailers helped led markets higher Wednesday, with consumer discretionary stocks in the S&P 500 up 0.5% and Target leading the charge after the company reported same-stores sales growth that outpaced expectations.
“Target really knocked it out of the park,” Chris Gaffney, president of EverBank World Markets, told the Wall Street Journal. “All of a sudden, people are saying the consumers are showing some strength again.”
The retail segment’s gains also followed data that revealed U.S. retailers generated their strongest sales growth all year in July, with e-commerce strength responsible for most of the rise.
Many were also waiting on the Fed minutes later Wednesday to sift through clues on where interest rates are heading and wen the central bank will start unwinding its balance sheet.
“I’m interested to see what the Fed has to say about the inflation landscape,” David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates Inc., told the WSJ.
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Inflation readings have slipped in recent months, remaining below the Fed’s 2% target rate, which has made markets skeptical about further monetary policy tightening.
Policymakers decided to keep rates unchanged in the July meeting and said they were planning to cut down the massive holdings of bonds “relatively soon.”
“If the minutes suggest a deviation, whether them being more hawkish or more dovish, that may cause the market to change direction,” Adam Sarhan, chief executive of Sarhan Capital, told Reuters.
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