US open: Equities edge higher as Fed hints at keeping interest rates on hold

US stocks 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.

Shortly before 1500 BST, the Dow Jones Industrial Average was up 42 points to 17,092, while the S&P 500 and the Nasdaq were both two points higher.

Fed casts doubt over rate hike in 2015

Minutes released on Thursday from the latest Federal Open Market Committee meeting showed the central bank almost hiked interest rated 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.”

On the economic data front, excluding fuel, import prices fell 0.1% month-on-month compared with a 1.6% drop in the previous month and with analysts’ expectations for 0.5% decline.

On a year-on-year basis, import prices tumbled 10.7%, with the slump in oil prices considered to be the main driver behind the drop.

"We think that following dollar strength and amid uncertainty about economic activity abroad, imported price pressures are likely to remain subdued in the coming months and act as a drag on consumer goods prices," analysts at Barclays said.

Earnings season kicks off on downbeat note

In company news, Alcoa declined 2.72% after the aluminium producer kicked off the earnings season late on Thursday by lowering its outlook for automotive production growth in China.

Gap plunged 7.25% after saying that total sales fell 1% last month on the back of currency headwinds.

Ascena Retail Group lost 3.10% 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 after a session-long rally, while European stocks were firmly in the black as commodity-related stocks extended their gains.

Oil prices were mixed, with West Texas Intermediate climbing 0.52% to $49.69 a barrel, while Brent crude slid 0.40% to $52.84 a barrel.

The dollar rose 0.30% and 0.22% against the yen and the pound respectively but lost 0.58% against the euro, while gold futures surged 1.38% to $1,154.73.