Guesswork continues on timing of US rate hike

US stocks fell slightly last week after China's sudden devaluation of the yuan, and they are likely to swing back and forth this week as guesswork continues on the timing of the next interest-rate hike.

The Federal Reserve will publish the minutes of its July meeting midweek, and traders will scrutinise the text for clues on the likelihood of a September hike. Before Beijing's foreign-exchange intervention suggested the Chinese slowdown was worse than thought, most stock investors had positioned for a hike in September.

"Investors in general are becoming increasingly concerned about a September start to the Fed's first rate-tightening cycle in nearly 10 years," said Sam Stovall, chief equity strategist for Standard & Poor's Capital IQ. "In addition, income-investors in particular are worried about how the start to a slow, yet long, period of rising short-term interest rates will affect the price of their higher yielding stocks."