Fed minutes, Target earnings, Musk’s ambitions – what’s moving markets

U.S. stock futures slipped lower Wednesday ahead of the release of the minutes from the last Federal Reserve policy meeting. Target heads up a deluge of earnings from the important retail sector, while semiconductors will also be in the spotlight as the U.S. government weighs up taking stakes in the sector. Tesla CEO Elon Musk is also reportedly shelving his political ambitions.

1. Fed minutes could show divisions
   Federal Reserve Chair Jerome Powell is set to speak at the Jackson Hole symposium at the end of the week, but investors may not have to wait until then for clues about the central bank’s next move as the minutes of the last meeting are due later in the session.

The Fed has maintained its policy rate in the 4.25%-4.50% range for all of this year, with some policymakers, and Powell in particular, expressing worries that the Trump administration’s tariffs could reignite inflation.

However, this stance has resulted in severe criticism from President Donald Trump, and some Fed officials have recently broken ranks, calling for lower interest rates.

These minutes could show how deep divisions run after Governors Christopher Waller and Michelle Bowman dissented at the last meeting, marking the first time two voting Fed officials have done so since 1993.

Investors and economists are betting the Fed will cut rates by a quarter of a percentage point next month with perhaps another reduction of similar size to come later in the year.

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The annual Jackson Hole gathering kicks off with informal interviews ahead of the formal agenda release Thursday evening. Powell’s key address on Friday morning will focus on the economic outlook.

2. U.S. futures fall ahead of Fed minutes
   U.S. stock futures slipped lower Wednesday, with investors cautiously awaiting the release of minutes from the last Federal Reserve policy meeting as well as earnings from a number of major retailers.

At 03:00 ET (07:00 GMT), the S&P 500 futures traded 12 points, or 0.2%, lower Nasdaq 100 futures dropped 75 points, or 0.3%, and Dow futures fell 85 points, or 0.2%.

The major indices closed in a mixed fashion Tuesday, with the S&P 500 falling 0.6% and the NASDAQ Composite dropping 1.5%, while the Dow Jones Industrial Average closed marginally higher.

Investors are likely to trade in a cautious manner Wednesday ahead of the key release of minutes from the last Fed policy meeting [see above] as they seek clues about future monetary policy ahead of the Federal Reserve’s Jackson Hole symposium later in the week.

There are also more quarterly earnings due from a number of major retailers, including Target [see below], Lowe’s and TJX before the bell.

U.S. companies have posted their strongest earnings beats in more than three years during the second quarter, according to an analysis by Jefferies, adding that the “difference between actual & consensus earnings growth is 12.3%, the widest spread since 1Q’22.”

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3. U.S. government looking at semiconductor equity stakes
   The U.S. government is weighing taking equity stakes in semiconductor firms receiving CHIPS Act subsidies to build factories in the country, according to a Reuters report.

Apart from Intel (NASDAQ:INTC), Commerce Secretary Howard Lutnick is also exploring deals with Micron Technology (NASDAQ:MU), Taiwan Semiconductor Manufacturing (NYSE:TSM) and Samsung (KS:005930) that would see Washington secure ownership interests in return for billions in grants, the report said.

The move would mark a historic shift in U.S. industrial policy, giving the government direct influence over companies key to national security. The White House has already confirmed talks with Intel on a potential 10% stake.

Washington last year allocated $6.6 billion to TSMC, $6.2 billion to Micron and $4.75 billion to Samsung, according to the report.

4. Target’s results in spotlight
   Target (NYSE:TGT) heads the earnings flow Wednesday, as the focus remains on the retail sector this week, with reports due from a host of big-box retailers and home improvement chains.

The struggling retailer reports fiscal second-quarter earnings before the bell, with investors looking for signs that it is getting back on track given annual sales have been roughly stagnant for about four years.

Wall Street expects the big-box retailer to report earnings per share of $2.03 and revenue of $24.93 billion for the last quarter, according to a survey of analysts by LSEG.

“We see increasing longer-term sales and margin risks for Target given slowing digital sales growth, a lack of scale in digital advertising and third-party marketplace, elevated tariff, pricing and merchandising headwinds, and increasing competitive threats from Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN),” analysts at Bank of America said, in a note late last week.

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Investors will also look for what the retailer says regarding tariffs, as Target’s imports account for roughly 50% of its cost of goods sold, versus Walmart’s 33%.

Home Depot (NYSE:HD) was the first of the major big-box retailers to report this week, with the U.S. home-improvement chain keeping its annual forecasts intact despite posting muted quarterly results on Tuesday.

Earnings are also due from Lowe’s Companies (NYSE:LOW) and TJX Companies (NYSE:TJX) before the open.

5. Musk shelving political ambitions – WSJ
   Elon Musk is quietly shelving his plans to start a political party, according to a report in the Wall Street Journal, a move that will likely be welcomed by Tesla (NASDAQ:TSLA) shareholders.

The Tesla CEO had in July said he would start a new party, called the America Party, to represent voters unhappy with both the Republicans and the Democrats.

This followed a major falling out with U.S. President Donald Trump, largely over Musk’s criticism of Trump’s “big beautiful bill,” which he claimed would undermine his efforts to cut government spending as part of the Department of Government Efficiency.

However, Musk has since made few actual moves towards establishing the third party, and the WSJ reported Musk as telling allies that he wants to focus his attention more on his companies, and is reluctant to alienate powerful Republicans .

Any sidelining of Musk’s political ambitions is expected to offer some relief to Tesla shareholders, who had grown increasingly concerned that he was becoming distracted from his responsibilities at the electric car-maker.

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(Reuters contributed reporting.)

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