U.S. stocks set to open higher ahead of Fed minutes

By Sruthi Shankar

(Reuters) - U.S. stocks were set to open higher on Wednesday, with investors awaiting the Federal Reserve's latest policy meeting minutes for clues on future interest rake hikes this year.

The central bank will release the details of the July policy meeting at 1400 ET (1800 GMT), which could offer insights on the debate over the policy outlook.

Policymakers unanimously decided to keep interest rates unchanged in the July 25-26 meeting and said they planned to reduce the central bank's massive holdings of bonds "relatively soon".

"Investors are looking at expectations of rates going up, but not right away, in a measured pace," said Andre Bakhos, managing director at Janlyn Capital. "I don't believe the Fed's going to bring any shocking news to investors."

A slide in inflation readings in recent months, which remain below the Fed's 2 percent target rate, have made the markets skeptical about a rate hike by December.

However, recent hawkish comments by New York Fed chief William Dudley advocating for another rate hike this year and strong retail sales data on Tuesday have upped the odds.

Chances of a December hike rose to 49.2 percent, up from 42 percent at the start of the week, according to CME Group's FedWatch tool.

At 8:33 a.m. ET, Dow e-minis were up 50 points, or 0.23 percent, with 20,760 contracts changing hands, and S&P 500 e-minis were up 5.25 points, or 0.21 percent, with 130,516 contracts traded.

Nasdaq 100 e-minis were up 14.75 points, or 0.25 percent, on volume of 30,606 contracts.

Data showed that U.S. homebuilding unexpectedly fell in July as the construction of single- and multi-family homes declined.

The Commerce Department said housing starts declined 4.8 percent to a seasonally adjusted annual rate of 1.16 million units.

On Tuesday, U.S. stocks closed little changed as declines in Home Depot and other retailers following results offset the gains from upbeat retail sales data and easing tensions between the United States and North Korea.

Shares of Target rose 3.74 percent in premarket trading after the company's profit and same-store sales beat estimates.

Urban Outfitters rose 19.74 percent after the apparel retailer reported quarterly profit and sales that beat estimates, leading to multiple price target raises.

Amazon edged lower after U.S. President Donald Trump tweeted the retail giant was doing "great damage" to tax paying retailers.

Bristol-Myers Squibb was down about 2 percent after its combination drug to treat previously untreated patients with a type of kidney cancer failed to meet one of the main goals of a late-stage trial.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)