U.S. stocks opened slightly higher on Wednesday but pared gains modestly throughout the morning, as market participants await minutes from the Federal Reserve’s latest meeting, as well as eye early results from companies reporting quarterly earnings.
The Dow Jones industrial average fell 20 points, while the S&P 500 and Nasdaq composite were each slightly higher.
Apple shares slipped after HSBC downgraded the tech giant’s stock over concern regarding Apple’s services business. Disney’s stock rose after its second upgrade in as many day, with BMO Capital Markets seeing upside as the company expands its theme park offerings and launches its own online streaming service.
The Federal Reserve will release the minutes of its March monetary policy meeting later in the session. Last month, the U.S. central bank decided to maintain interest rates and hold off an any further increases this year. The minutes should provide additional details for investors to understand why most Fed officials do not expect to raise interest rates in 2019.
Seven CEOs of the largest U.S. banks are testifying before a Congressional finance committee on Wednesday.
“The big talk of the day is going to be the bankers,” Robert Pavlik, chief investment strategist at SlateStone Wealth, told CNBC. “I don’t think anyone’s expecting any kind of impact but many people will be watching, even just to get soundbites out of it.”
U.S. consumer pricing data for March “came out a little hotter than expected,” Pavlik said, although the results did not have much of an impact on Dow futures. The Labor Department said its Consumer Price Index rose 0.4% in March, the largest increase in over a year.
Meanwhile, global economic growth was a sore point for risk asset markets. The International Monetary Fund (IMF) cut its forecast for world economic growth this year, saying a slowdown could force world leaders to coordinate stimulus measures.
The fund said it expects the world economy to grow by 3.3% this year. That’s down from its previous outlook of 3.5%, which was also a downgrade.
In corporate news, Delta Air Lines and MSC Industrial are both set to release their latest quarterly results shortly before the bell. Bed Bath & Beyond is set to publish its earnings after market close.
