Wall Street was poised for a slightly downbeat trading day on Wednesday, with investors opting for caution ahead of Federal Reserve minutes that could reveal if a rate hike is still on the table this year.
Futures for the Dow Jones Industrial Average lost 16 points, or 0.1%, to 18,508, while those for the S&P 500 index dropped 0.30 points to 2,176.50. Futures for the Nasdaq 100 index gave up 0.25 points to 4,7998.25.
The negative mood ahead of the open came after stocks closed lower on Tuesday (http://www.marketwatch.com/story/us-stocks-hunt-for-another-record-session-as-dollar-tumbles-2016-08-16) following hawkish comments from Fed officials. The S&P 500 index ended 0.6% lower, while the Dow average and Nasdaq Composite lost 0.5% and 0.2%, respectively. All three benchmarks on Monday closed at record levels.
All about the Fed: However, hints that an increase in interest rates is coming took stocks off their all-time highs. William Dudley, president of the New York Fed, said the time for another hike is approaching and a rate increase as soon as September is a possibility. Meanwhile, Atlanta Fed President Dennis Lockhart said he has confidence in the outlook for the U.S. economy and, as a result, wouldn't rule out "at least one" interest rate (http://www.marketwatch.com/story/feds-lockhart-open-to-at-least-one-rate-hike-this-year-2016-08-16) hike this year.
The dollar rose after those remarks and continued to climb on Wednesday. The ICE dollar index added 0.2% to 94.962.
The comments came ahead of the closely watched minutes from the Fed's July 26-27 meeting, due at 2 p.m. Eastern Time on Wednesday. Additionally, St. Louis Fed President James Bullard will speak about monetary policy at the Wealth and Asset Management Research Conference at Washington University in St. Louis at 1 p.m.
"[Dudley's] message was clear; the market is far too complacent about the rate hike," said Naeem Aslam, chief market analyst at Think Markets, in a note.
"Today's FOMC minutes may influence the odds in favor of a rate hike during the month of December, as September still looks way too unrealistic as the Fed would have to have prepared the market for this," he said.
The market is now pricing in a 15% chance of a September rate hike and a 52% probability for it happening in December.