Wall Street set to open little changed ahead of Fed minutes

By Tanya Agrawal

(Reuters) - U.S. stocks looked set to open little changed on Wednesday ahead of the Federal Reserve releasing the minutes of its May meeting that could cement the chances of a rate hike next month.

Fed funds futures show that traders now see a 75 percent chance that the U.S. central bank will raise interest rates in June. The minutes will be released at 2 p.m. ET (1600 GMT).

Investors are also awaiting more details regarding the Fed trimming its $4.5 trillion balance sheet.

"Our U.S. economists expect the minutes to come down on the hawkish side and continue to expect the Fed to hike in June and September and announce balance sheet reduction in December," Citi analysts wrote on Wednesday.

While recent economic data has been mixed, with signs of a dip in consumer sentiment and spending, the job market continues to strengthen. That could give the Fed impetus to continue with its path of monetary tightening.

The tightening labor market and historically low mortgage rates have helped the housing market recovery. Amid a raft of housing data due is a report that is expected to show existing home sales fell in April, compared with March.

Dow e-minis were up 12 points, or 0.06 percent, with 15,412 contracts changing hands at 8:30 a.m. ET.

S&P 500 e-minis were up 0.5 points, or 0.02 percent, with 91,965 contracts traded.

Nasdaq 100 e-minis were up 9.25 points, or 0.16 percent, on volume of 20,397 contracts.

Oil prices were slightly lower as investors waited for news from Vienna where ministers from OPEC and other exporting countries were discussing whether to extend production cuts into the first quarter of next year. [O/R]

A nine month extension cut along with a fifty-fifty chance of a token cut would send a loud positive message to the market, Peter Cardillo, chief market economist at First Standard Financial wrote in a note.

Shares of Lowe's fell 3.3 percent to $79.59 in premarket trading after the No. 2 U.S. home improvement chain reported a lower-than-expected profit and comparable sales. Bigger rival Home Depot was off 0.5 percent.

Nvidia rose 2.8 percent to $140.80 on a report that SoftBank has built a $4 billion stake in the chipmaker.

Bunge fell 6.4 percent to $76.49 after the grains trader said it was not in talks with Swiss mining and commodities group Glencore, following an informal approach.

Tiffany fell 5.6 percent to $87.94 after the jewelry retailer reported a surprise drop in quarterly comparable sales and reported lower-than-expected quarterly sales.

(Reporting by Tanya Agrawal in Bengaluru, Additional reporting by Jamie McGeever in London; Editing by Savio D'Souza)