Stocks slip, dollar flat ahead of US Fed minutes

WASHINGTON/LONDON: Wall Street opened with a dip Wednesday, while oil and currencies largely held steady as investors awaited the Federal Reserve meeting minutes.

All three major US indices opened trading with a decline, a few hours ahead of the release of the July minutes that will be closely watched for signs of when the central bank could start tapering its bond purchases.

The Dow Jones Industrial Average fell 0.25%, the S&P 500 lost 0.17% and the Nasdaq Composite dropped 0.06%. The MSCI world equity index, which tracks shares in 45 nations, fell 0.07%.

After posting four days of declines on concerns rising COVID-19 cases could diminish travel demand, oil regained its footing Wednesday. Brent crude was last up 0.97%, at $69.7 a barrel. US crude was last up 0.83%, at $67.14 per barrel.

The steady rise of stock markets had taken a hit Tuesday, as investors found enough reasons for pessimism about the economy to drive markets lower.

The ongoing spread of the COVID-19 Delta variant and disappointing economic data is driving up concerns the global economic comeback might be diminished, while political turmoil in Afghanistan and a new China crackdown on the technology sector added fuel to the fire.

Data on Wednesday showed that US homebuilding fell more than expected in July, the latest in several economic indicators that have missed expectations.

"Investors found plenty of catalysts to take profits yesterday," said National Securities Chief Market Strategist Art Hogan in a note. "While none of these headwinds are necessarily new, with markets at all-time highs, the collective force was enough to cause a drawdown."

European equities sag on fresh virus woes

Now, investors will be watching to see if the Fed offers any hint of whether it believes the economy has rebounded enough for it to prepare to shrink its monthly bond purchases.

"To see a successful taper in the next few months, we need to see more of those strong job prints," said John Luke Tyner, fixed income analyst and portfolio manager at Aptus Capital Advisors.

"I don't see the Fed backing out of support yet, I think we need to see the unemployment rate fall below 5%."

US Treasury yields edged higher in morning trading. Benchmark 10-year notes rose 1 basis point to 1.27%. The yield curve between 2-year and 10-year notes steepened 1 basis point to 106 basis points.

The dollar was largely flat with investors waiting for Fed signals. The dollar index, which tracks the greenback versus a basket of six currencies, was up 0.01% to 93.135.

Similarly, trading in safe-haven gold was also sluggish. Spot gold prices rose 0.01% to $1,786.16 an ounce. US gold futures edged 0.04% higher to $1,788.50.