US stocks were trading on the back foot on Wednesday after better-than-expected retail sales data heightened investors’ focus on the latest meeting minutes from the US Federal Reserve which were due out later in the session.
At 1611 BST, the Dow Jones Industrial Average was 0.62% or 210.28 points lower to 33,942.46, while the technology heavy Nasdaq Composite was down by 1.52% or 199.40 points alongside to 12,903.16.
In the background, the yield on the benchmark 10-year US Treasury yield was modestly higher and Fed funds futures were pricing in roughly 70% odds of official interest rates rising to 3.75-4.0% by year end.
Total US retail sales for July came in flat month-on-month, short of the consensus for a rise of 0.1%, but excluding automobiles and gas stations, retail sales came in solidly ahead of economists’ forecasts.
Indeed, some economists said they were now expecting upwards revisions to economists’ forecasts for US GDP in the third quarter and said the same was possible for second quarter GDP estimates.
The decline in petrol prices was the key factor behind the decline in spending at petrol stations.
On the corporate front, all eyes were on Target whose second quarter profits missed estimates by a very wide margin as the discount retailer moved to aggressively cut excess inventories.
Nevertheless, the company blamed those high stockpiles on earlier moves to try and forestall disruptions to its supply chains and sounded a confident note on the outlook for the back half of the year.
