The major averages registered modest victories on Wednesday, but their performances felt somewhat disappointing as an optimistic steady climb in the morning turned into a fight to hold on in the afternoon. The Nasdaq (+0.2%) finished slightly above the S&P 500 (+0.1%) and the Dow (+0.1%) while the small-cap Russell 2000 (unch) lagged.

Equity indices opened Wednesday's session with modest gains and continued ticking up into the early afternoon. However, news that President Trump will end the Manufacturing Council and Strategy & Policy Forum after several CEOs announced their departures from the two groups prompted a modest sell off that left the major averages just north of their flat lines going into the FOMC minutes release.

The minutes from the July FOMC meeting showed increasing concern among several policymakers about softer than expected inflation readings. Despite the concern about slowing inflation, most Fed officials remain in favor of announcing a balance sheet move at the upcoming policy meeting. The FOMC will kick off its next two-day meeting on September 19.

U.S. Treasuries finished higher across the yield curve on Thursday. The bulk of the gains came in response to the disbandment of President Trump's business councils, but the minutes also played a supporting role. The 10-yr yield slipped four basis points to 2.23% while the 2-yr yield dropped three basis points to 1.33%. Meanwhile, the U.S. Dollar Index (93.42, -0.33) finished lower by 0.4%.

Stocks seesawed a bit following the minutes release, but ultimately ended near their pre-release levels. Nine of the S&P 500's eleven sectors finished in the green with the lightly-weighted materials sector (+0.9%) leading the charge. Copper-mining giant Freeport-MCMoRan (FCX 14.77, +0.80) was the sector's top performer, climbing 5.7%, amid a rally in the copper futures market ($2.95/lb, +2.4%).

The consumer discretionary sector (+0.5%) also showed relative strength as investors cheered the latest earnings reports from Target (TGT 56.31, +1.96) and Urban Outfitters (URBN 19.76, +2.94). TGT added 3.6% after reporting better than expected earnings and an increase of 1.3% in comparable same-store sales while URBN surged 17.5% after beating top and bottom line estimates.

On the flip side, the energy and financials sectors were the only two spaces to finish in negative territory, losing 1.1% and 0.2%, respectively. While the financial sector's loss was modest, its status as the second-heaviest sector by weight--first being technology (+0.3%)--and its important role in driving economic activity didn't bode well for the broader market.

Meanwhile, crude oil weighed on the energy sector, dropping 1.6% to $46.78/bbl, following a mixed EIA inventory report. The Energy Information Administration reported that U.S. crude stockpiles decreased by 8.9 million barrels (consensus -3.0 million barrels) for the week ended August 11 while gasoline inventories increased by 22,000 barrels (consensus -1.1 million barrels).

Reviewing Wednesday's economic data, which was limited to Housing Starts for July and the weekly MBA Mortgage Applications Index:

• Housing starts decreased to a seasonally adjusted annualized rate of 1.155 million units in July, down from a revised 1.213 million units in June (from 1.215 million). The Briefing.com consensus expected starts to increase to 1.217 million units. Building permits decreased to a seasonally adjusted 1.223 million in July from a revised 1.275 million in June (from 1.245 million). The Briefing.com consensus expected a reading of 1.247 million.
  • The key takeaway from the report is that a pullback in starts occurred after a strong June, returning the series to the middle of a range that has been in effect over the past two years. Single-family starts declined 0.5% from June, which won't do much to alleviate supply constraints.
• The weekly MBA Mortgage Applications Index ticked up 0.1% to follow last week's 3.0% increase.

On Thursday, investors will receive a slew of economic reports, including the weekly Initial Claims Report (Briefing.com consensus 240K) at 8:30 ET, the August Philadelphia Fed Index (Briefing.com consensus 17) also at 8:30 ET, the July Industrial Production (Briefing.com consensus 0.3%) and Capacity Utilization (Briefing.com consensus 76.7%) Report at 9:15 ET, and the Conference Board's Leading Economic Index for July (Briefing.com consensus 0.3%) at 10:00 ET.

• Nasdaq Composite +17.9% YTD
• Dow Jones Industrial Average +11.5% YTD
• S&P 500 +10.2% YTD
• Russell 2000 +2.0% YTD