US pre-open: Futures edge higher on Fed minutes, oil prices rally

US stock futures edged higher on Friday, after the minutes from the latest Federal Reserve meeting showed the US central bank might delay an interest rates hike until next year.

The Dow Jones Industrial Average is expected to open approximately 24 points higher, while the S&P 500 and the Nasdaq are both set to begin the final session of the week two points higher than Thursday’s close.

Fed casts doubts over 2015 hike

Minutes released on Thursday from the latest Federal Open Market Committee meeting showed the Fed almost hiked interest rates but refrained as a result of the slowdown in China and its potential impact on the US.

According to the minutes, policymakers thought it was more prudent to wait for evidence that the economy had not deteriorated and that inflation would gradually move back toward towards the 2% annual target.

“The Fed have strayed off their well-worn path. The market has lost visibility on Fed’s policy path but the Fed members are not less confused,” said Ipek Ozkardeskaya, market analyst at London Capital Group.

“Unemployment and inflation targets were the foundation of Fed’s policy and these key economic indicators are now diverging from each other.

“The improvement in unemployment has not led to any acceleration in inflation.”

Earnings season kicks off on downbeat note

In company news, Alcoa declined 2.91% in pre-market trading after the aluminium producer kicked off the earnings season late on Thursday by lowering its outlook for automotive production growth in China.

Gap gained 1.97% ahead of the bell, despite saying that total sales fell 1% last month on the back of currency headwinds.

Ascena Retail Group rallied 7.46% in pre-market after Golden Gate Capital revealed having a 9% stake in the company.

The content of the Fed minutes boosted Asian equity markets, which closed the session on a high, while European stocks were firmly in the black as commodity-related shares extended their gains.

Oil prices rallied, with West Texas Intermediate climbing 2.73% to $50.82 a barrel, while Brent crude gained 1.74% to $53.99 a barrel.

The dollar was broadly flat against the pound but fell 0.61% against the euro and rose 0.30% against the yen, while gold futures surged 1.48% to $1,155.88.

On the economic data front, investors will analyse a report on the import price index for September at 1330 BST, while wholesale inventories and wholesale trade sales for August are on tap at 1500 BST.

Atlanta Fed president Dennis Lockhart will give his views on the US economy during a speech in New York at 1410 BST.