US stocks lower in midday trade as global markets fall

Stocks tumbled at the open Wednesday as investors focus on upcoming rate hikes ahead of the release of minutes from the last Federal Reserve meeting.

At 13:55 p.m. ET (1755 GMT) the Dow Jones industrial average was down 127 points, or 0.73 percent, at 17,384.34.

All the 10 major sectors were lower, with four of them down more than 1 percent. The biggest decliners were in the oil and energy industries, following a report that showed an unexpectedly strong increase in oil inventories last week.

FED WATCH: Investors are waiting for clues from the Fed on when the nation’s central bank could begin to raise interest rates.

The Fed appeared on track to raise interest rates later this year but has signaled a desire to see further economic gains and higher inflation.

On Tuesday, U.S. stocks closed with modest losses, as the Dow snapped a three-day winning streak (http://www.marketwatch.com/story/us-stock-futures-slip-as-investors-wait-for-reasons-to-buy-2015-08-18).

September federal funds futures implied traders expect a 45 percent chance of the Fed raising rates in September, while likelihood of a December rate increase held steady at 73 percent according to CME Group’s FedWatch program.

Markets were also on edge as stocks in China were volatile for a second straight session with the Shanghai composite index slumping as much as 5% before recovering to finish up 1.2%.

Elsewhere, European stocks fell amid disappointing earnings and ongoing worries about China, although there was some good news as it emerged the German parliament has backed Greece’s third bailout.

ANALYST TAKE: “The Chinese equity market may have ended on a positive note, but the erratic swings should be viewed with caution, and such a wide trading range tells us that China will not be stable for some time”, said David Madden, market analyst at IG. Brent crude, a benchmark for global oils used by many U.S. refineries, fell $1.31 to $47.51 per barrel.

Other data due Wednesday is expected to show consumer prices rose 0.2 percent in July, less than the 0.3 percent rise in June.

Chevron and Exxon, the two largest publicly traded oil companies, were down 3 percent and 2 percent respectively.

The dollar was broadly flat against the main currencies, while gold futures climbed 0.50% to $1,122.50.

Lowe’s shares fell 1.6 percent to $71.85 in premarket trading after the No. 2 U.S. home improvement chain’s quarterly profit missed expectations.