Wall Street set to open higher, Fed minutes eyed

Wall Street looked set for a second day of gains on Wednesday as oil prices edged up slightly, and investors awaited the minutes of Federal Reserve’s December meeting in which it raised interest rates.

The Fed cited strength in the labor market and a slight uptick in inflation among reasons for its move. Investors will pore over the minutes to assess policymakers’ view on the incoming administration. The minutes of the Dec. 13-14 meeting are expected at 2:00 p.m. ET.

With just over two weeks left before President-elect Donald Trump takes office, investors are waiting for the finer details of his proposed policies such as tax cuts and higher fiscal spending. Some analysts have warned of a potential correction in a post-election rally, which has helped the Dow Jones Industrial Average .DJI to come within a hair’s breadth of 20,000.

“I think the market has gotten ahead of itself and is probably primed to give something back,” said Robert Pavlik, chief market strategist at Boston Private Wealth. “When it could happen and how long it lasts depends on the new administration’s ability to pass some of the initiatives that they pushed for during the election.”

The S&P 500 is trading at 17.5 times forward 12-month earnings, well above the 10-year median of 14.7 times, according to Thomson Reuters data. Dow e-minis 1YMc1 were up 43 points, or 0.22 percent at 8:26 a.m. ET, with 16,031 contracts changing hands. S&P 500 e-minis ESc1 were up 5.75 points, or 0.26 percent, with 106,101 contracts traded. Nasdaq 100 e-minis NQc1 were up 10.75 points, or 0.22 percent, on volume of 12,897 contracts.

Wall Street ended the first trading of the new year with sharp gains as increases in technology stocks helped offset a decline in oil prices. Oil, which hit an 18-month high on Tuesday before reversing course due to a strong dollar, was up marginally at $ 55.67 on Wednesday. The dollar fell to profit-taking and was down 0.27 percent, a day after its index .DXY rose to a 14-year high.