US close: Stocks slip after FOMC minutes, mixed retail earnings

US stocks declined on Tuesday with the S&P 500 snapping a five-day winning streak after minutes of the latest monetary policy meeting showed that officials are in no rush to start cutting interest rates.

The Dow Jones Industrial Average finished 0.18% lower, the S&P 500 fell 0.20% while the Nasdaq dropped 0.59%.

The Federal Open Market Committee (FOMC) meeting on 1 November showed revealed discussions about leaving policy "at a restrictive stance for some time" until inflation moves down sustainably to the 2% target.

"The Fed has not completely ruled out additional rate hikes, noting that further tightening would be appropriate 'if' progress towards the 2% inflation target was 'insufficient', said Michael Pearce, economist at Oxford Economics.

"However, the minutes made clear that the Fed is taking a cautious approach, with participants generally judging that the risks had 'become more two-sided'."

Oxford Economics predicts that the first interest-rate cut will not come until the September 2024 meeting, later than what is priced into financial markets.

Elsewhere on the macro front, the Chicago Federal Reserve's national activity index fell to -0.49 in October, down from -0.2 in September and its lowest reading for the last seven months.

On another note, existing-home sales dropped by 4.1% last month to 3.79m, from 3.96m in September. Analysts were expecting a smaller fall to 3.90m. Compared with October 2022, sales were down 14.6% from 4.44m.

Markets react to retail earnings

Dick’s Sporting Goods lifted its full-year outlook on Tuesday following a "strong" third quarter, driving shares 3% higher. The US retailer - which cut its full-year profit guidance in August - said third-quarter comparable store sales rose 1.7%, and raised the outlook for 2023 to a range of 0.5% to 2% growth, having previously forecast sales would be flat to 2% higher.

In contrast, shares in US home improvement retailer Lowe’s were in the red after it forecasted a 5% full-year sales decline compared to its previous estimate of 2% to 4%. The guidance came as it reported a 7.4% decline in third-quarter comparable sales, due to reduced spending on DIY discretionary projects.

Meanwhile, Kohl's and American Eagle Outfitters both tanked after disappointing the market with weak full-year guidance, while Burlington Stores surged after upping its full-year profit targets.

Meanwhile, Amazon was lower on the back of market chatter that founder Jeff Bezos would be selling a significant number of shares.