How major USA stock market indexes fared on Wednesday

Traders on the floor of the New York Stock Exchange

Getty Images Traders on the floor of the New York Stock Exchange

US retail sales recorded their biggest drop in 16 months, while consumer prices fell unexpectedly in May, raising questions about the Fed's ability to further tighten monetary policy.

USA stocks pared gains to trade little changed on Wednesday as a set of weak economic data weighed on bank stocks, while investors braced for a near-certain interest rate hike by the Federal Reserve.

Analysts said lacklustre data on USA homebuilder sentiment and industrial production dented confidence in light of the Federal Reserve's decision on Wednesday to raise the benchmark lending rate for the third time in six months, and signal an additional hike later this year.

The Nasdaq composite advanced 44.90 points, or 0.7 percent, to 6,220.37.

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USA market indexes were lower on Thursday. "It seems they should be doing the opposite", said Robert Pavlik, chief market strategist at Boston Private Wealth.

The Dow Jones Industrial Average fell 79 points, or 0.4%, to 21295.

Thursday's figures led Blerina Uruci at Barclays Research to tell clients: "Today's soft inflation report reduces our conviction that the Fed will be able to raise rates for a third time in December".

Investors will also be looking for any details on the Fed's plans to trim its $4.5 trillion balance sheet in the face of improving economic conditions. The index had hit a record intraday high of 21,354.56 shortly after the open. The tech-heavy Nasdaq fell 0.41%, to 6,194.89. The Dow Jones Small-Cap Growth TSM Index closed at 8,470.00 for a loss of 53.04 points or 0.62%.

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The S&P 500 financials sector dropped 0.9 percent after the release of weaker-than-expected U.S. CPI and retail sales data. The stocks provided the biggest boost to the S&P and the Dow.

Traders work on the floor of the New York Stock Exchange June 2, 2017.

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