In a setback for the US stock market, major indexes pulled back from their recent record highs on Wednesday. The S&P 500 fell 0.3% to 5,307.01, after reaching an all-time high the day before. The Dow Jones Industrial Average dropped by 0.5% to 39,671.04, while the Nasdaq composite slipped 0.2% to 16,801.54, also after hitting a new record.

The decline in stock indexes came after the release of minutes from the Federal Reserve's latest policy meeting. The minutes revealed concerns among Fed officials about controlling inflation, which had risen higher than expected earlier this year. The minutes also mentioned that some participants would consider raising interest rates if inflation worsens, despite Fed Chair Jerome Powell's statement that a rate cut is more likely.

These developments raised hopes among investors that the Federal Reserve may cut interest rates at least once this year. However, the uncertainty surrounding interest rates and inflation added to market volatility.

The market was further shaken by disappointing earnings reports from retail giant Target. The company's stock tumbled 8% as its latest quarter profits fell short of analysts' expectations. Target also revised its profit forecasts downward, citing hesitant consumer spending on non-essential items. In an effort to combat sluggish sales, Target announced price cuts on everyday basics earlier this week.

In addition, Lululemon Athletica saw a decrease of 7.2% in its stock price after the announcement that its chief product officer would be leaving the company. Lululemon also disclosed plans to restructure its organization and eliminate the position of chief product officer.

However, there were some positive news as well. Petco Health & Wellness reported better-than-expected results and revenue for the latest quarter, leading to a 17.6% surge in its stock. TJX, the parent company of TJ Maxx and Marshalls, also saw a rise of 3.5% in its stock price after surpassing profit expectations and increasing its earnings per share forecast for the year.

In the bond market, the yield on the 10-year Treasury inched up to 4.42% from 4.41%, while the two-year yield rose slightly higher to 4.87% from 4.84%. The minutes from the Fed's meeting in May hinted at a possible need for longer high interest rates to control inflation, but recent data showing softer inflation and economic indicators may have influenced some officials' views.

Central banks worldwide are eager to cut interest rates. However, Bank of America strategist Athanasios Vamvakidis suggests that these cuts may be shallow and delayed due to solid economic performance and persistently high inflation.

Internationally, stock markets in Europe and Asia experienced modest declines. London's FTSE 100 dropped 0.5% following a stronger-than-expected inflation reading, signaling less likelihood of a rate cut in June. Tokyo's Nikkei 225 also fell 0.8% after Japan reported an increase in its trade deficit for the previous month.

The retreat in US stock indexes highlights the ongoing concern over high interest rates and their impact on various sectors of the economy. Investors will closely monitor future developments, particularly any indications from the Fed regarding its monetary policy decisions and their potential effects on the markets.