1. Chinese stock market volatility continues
The Shanghai Composite took investors on another roller-coaster ride on Wednesday, tumbling by as much as 5% after the open, before paring losses after the midday break to end up 1.3% as Beijing’s massive stock-rescue operation kicked into gear.
Chinese stock markets slumped 6% a day earlier amid growing concerns over the health of the Asian nation's economy and worries that policymakers may allow the yuan to continue to depreciate, fueling fears over a currency war that could destabilize the global economy.
2. Investors await FOMC meeting minutes
Investors will be focusing on Wednesday’s minutes of the July Federal Reserve meeting due at 2:00PM ET, which it was hoped would provide more clarity on its plans to hike short-term interest rates for the first time since 2006.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
Some traders believe the U.S. central bank could postpone raising interest rates next month, despite a recent batch of upbeat economic data, as officials are likely to remain concerned over global growth and inflation pressures due to China’s shock currency devaluation move and weak commodity prices.
3. U.S. inflation data in focus
The Commerce Department is expected to report at 8:30AM ET that consumer prices rose by 0.2% in July, after increasing 0.3% in June. Core inflation is forecast to gain 0.2%, after rising 0.2% a month earlier.
A stronger-than-forecast increase would reinforce expectations for higher interest rates as soon as next month.
4. German parliament votes in favor of third Greek bailout package
Germany's Bundestag, its lower house of parliament, voted in favor of Greece's third bailout package earlier Wednesday. A total of 454 lawmakers voted in favor of the €86 billion deal. Votes against totaled 113, while 18 abstained.
5. Wall Street earning season begins to wind down
U.S. retail giants Target Corporation (NYSE:TGT), Staples Inc (NASDAQ:SPLS) and Lowe`s Companies Inc (NYSE:LOW) are due to report quarterly earnings ahead of Wednesday's opening bell, while NetApp (NASDAQ:NTAP), L Brands (NYSE:LB) and Synopsys Inc (NASDAQ:SNPS) are due after the bell.