Updated from 10:57 a.m. ET, Wednesday, July 5.
Stocks moved mostly lower on Wednesday, July 5, as Wall Street returned from its Independence Day break and a selloff in crude pressured the energy sector.
The S&P 500 was up 0.1%, the Dow Jones Industrial Average fell 0.06%, and the Nasdaq was up 0.4%.
Crude oil prices were lower on Wednesday after Russia knocked back the chances of further cuts among the Organization of Petroleum Exporting Countries. Four government officials have ruled out deeper production cuts as a proposal when the group meets later in July, according to Bloomberg. OPEC and non-OPEC countries, including Russia, agreed in May to extend a production-cut agreement through March 2018.
Investors also awaited delayed data on domestic inventories. Weekly stockpiles data from the Energy Information Administration have been pushed back a day because of the public holiday and will be released on Thursday, July 6, at 10:30 a.m. ET.
West Texas Intermediate crude was down 3.5% to $45.42 a barrel on Wednesday.
The energy sector was the worst performer on markets Wednesday. Major oil producers Exxon Mobil Corp. (XOM) , Schlumberger Ltd. (SLB) , Chevron Corp. (CVX) , and Halliburton Co. (HAL) were lower, while the Energy Select Sector SPDR ETF (XLE) declined 1.9%.
Investors also awaited for details on the Federal Reserve's plans to curb economic stimulus. Minutes from the Federal Reserve's meeting in June will be made public at 2 p.m. ET. The Federal Open Market Committee, the monetary policy arm of the U.S. central bank, raised interest rates by 25 basis points at its June 13-14 meeting, setting the target range at 1% to 1.25%.
The increase was the Fed's second of the year and was taken as a vote of confidence in the U.S. economic recovery and future pace of growth.
Most Fed officials also telegraphed one more rate hike this year and three in 2018. Fed Chair Janet Yellen gave projections of median short-term rates as 1.4% at the end of this year; 2.1% at the end of 2018; and 2.9% at the end of 2019.
The Fed also indicated that recent inflation weakness was transitory.
"Inflation ... is well below where the Fed expects it to be when unemployment is this low," Aberdeen Asset Management Investment Strategist Luke Bartholomew wrote in a note. "They are still convinced that the old relationship between unemployment and inflation will assert itself eventually."
"But the minutes might show that there's more disagreement about this view than the Fed leadership expresses in public. That would be significant," he added. "A divided-sounding Fed could be a catalyst for the relatively quiet concerns about inflation and a policy error to grow."
Investors will be on the lookout for any language that suggests when the Fed could begin to unwind its balance sheet. Fed members have previously said that the central bank could begin to unwind the $4.5 trillion in bonds it holds on its balance sheet as early as this year, and private economists have suggested it may start in October.
Factory orders in the U.S. in May declined by 0.8%, according to the Census Bureau. The drop was slightly steeper than an anticipated 0.7% decline. New orders for manufactured goods have declined for two months in a row. The measure decreased by 0.3% in April.
Overseas, escalating tensions in Asia provided another check on Wall Street's momentum. North Korea said Wednesday that its intercontinental ballistic missile, fired into Japan's Exclusive Economic Zone early Tuesday, was able to carry a large nuclear warhead. The U.S. Defense Department believes the missile could reach as far as Alaska and possibly other parts of the North American mainland.
In response, U.S. Secretary of State Rex Tillerson called the missile firing a "new escalation of threat" and the U.S. has called for an emergency meeting of the U.N. Security Council. The missile firing comes days before of a meeting of G20 leaders where a discussion of the proliferation of weapons in Pyongyang will be on the agenda.
The North Korea threat could prevent the Dow from topping new records on Wednesday. The blue-chip index reached an intraday record in the shortened session on Monday, July 3, amid significantly lighter trading volume. Markets were closed on Tuesday in honor of the July 4 holiday.
