Questions over the inflation outlook and what it means for future rate hikes kept the Federal Reserve split at its September meeting. Even so, stocks still marched to new records on Wednesday, Oct. 11. 

The Dow Jones Industrial Average was up 0.18%, clinching a record for the second day in a row. The S&P 500 gained 0.18% as well, and the Nasdaq added 0.25%, both also reaching new records.

Many members of the Federal Open Market Committee said another rate hike by year's end was likely to be warranted if the medium-term outlook remains unchanged, according to minutes from the September meeting. However, some said that decision should be based on incoming data on inflation.

Inflation trends remained a conundrum to most members. Participants "expressed concern that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent, and it was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted." 

The chances of a December rate hike slipped to 86.7% in the afternoon session from 92% before the minutes, according to CME Group fed funds futures. Markets are currently pricing in a 25-basis-point rate hike that would put the federal funds rate at 1.25% to 1.5%.

The need to normalize monetary policy as the economy recovers and a concern over inflation trends has left the Fed mixed on how to proceed. Arguments on both sides have merit, according to analysts.  

"Any rebound in inflation could put the Fed "behind the curve" and raising rates too slowly while lower inflation may imply the Fed is being too aggressive in raising rates," said Bryce Doty, senior portfolio manager at Si Fixed Income Advisers, in a note. "Understandably, the minutes suggest there is not a consensus amongst Fed members on when to best raise rates again."

Earlier, Chicago Fed President Charles Evans said that it was too early to determine whether December was right for a rate hike. Evans told Bloomberg that inflation remains too low and he doesn't expect the measure to reach its 2% target soon.

A rally in consumer stocks stretched into day two on Wednesday, this time led by deal talks and analyst action in two of the sector's largest names. Kroger Co. (KR) - Get Report jumped 1.1% on the announcement it was considering unloading its convenience store business. The company is exploring strategic alternatives for its 784 convenience stores stretched across 18 states. Goldman Sachs is advising the process.

Colgate-Palmolive Co. (CL) - Get Report increased nearly 3% after SunTrust Robinson Humphrey upped its rating to buy from hold and boosted a price target to $85 from $65. Analyst William Chappell Jr. sees weakness over the past three quarters as an "anomaly." In the fourth quarter, Chappell expects the company to "cycle through these issues" and "embark on a path back to its target organic growth rates."

Kroger and Colgate-Palmolive led consumer staples stocks in another rally on Wednesday. Walmart Stores Inc. (WMT) - Get Report had driven gains a day earlier. Other stocks on the rise on Wednesday included Unilever NV (UL) - Get Report , PepsiCo Inc. (PEP) - Get Report and Ambev SA (ABEV) - Get Report . The Consumer Staples Select Sector SPDR ETF  (XLP) - Get Report  increased 0.2%.

Big banks kick off the third-quarter earnings season at week's end. Citigroup Inc. (C) - Get Report and JPMorgan Chase & Co. (JPM) - Get Report will report earnings on Thursday, Oct. 12, and Bank of America Corp. (BAC) - Get Report , Wells Fargo & Co. (WFC) - Get Report and PNC Financial Services Group Inc. (PNC) - Get Report on Friday, Oct. 13.

Citigroup is a holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells C? Learn more now.

Analysts anticipate another quarter of earnings growth. The third-quarter blended earnings growth estimate sits at 5.5%, while revenue growth is expected to come in at 4.3%, according to Thomson Reuters estimates.

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"Hurricane impacts aside, we have several reasons to be optimistic, including solid manufacturing data, recent U.S. dollar weakness, and resilient estimates," LPL Research analysts wrote in a note. "The S&P 500 Index has exceeded earnings expectations 33 straight quarters and we see no reason why the third quarter won't make it 34."

Crude oil prices were slightly lower on Wednesday even after the Energy Information Administration upped its forecasts through to 2018. The agency anticipates West Texas Intermediate to settle at around $49.69 a barrel this year, 1.7% higher than previous targets, and to climb to $50.57 a barrel next year, 2% higher than before.

West Texas Intermediate crude was down 0.2% to $50.80 a barrel on Wednesday. 

The number of job openings held near record highs in August, according to the latest Job Openings and Labor Turnover Survey. The measure fell to 6.08 million from 6.14 million in July. Openings rose to their highest level in seventeen years in July. 

Alibaba Group Holding Ltd. (BABA) - Get Report , the Chinese e-commerce giant, said Wednesday it would invest more than $15 billion in research and development over the next three years, with the intention of increasing collaboration and developing cutting-edge technologies.

Alibaba said it was launching the Alibaba DAMO Academy, which stands for discovery, adventure, momentum and outlook, to oversee the opening of R&D labs worldwide and to recruit scientists and researchers. Alibaba's chief technology officer, Jeff Zhang, will lead the unit.

In analyst news, Inc. (AMZN) - Get Report edged slightly higher on Wednesday after Credit Suisse upped its price target to $1,350 from $1,000 and reiterated an outperform rating. Analyst Stephen Ju is confident in Amazon's position in the grocery market even as competitors up their investment in the space. 

Ju also lifted his price target on Snap Inc. (SNAP) - Get Report to $20 from $17. The price target increase suggests a 39.5% upside to its current levels. Ju expects daily active users in North America to increase to around 3.2 million from 1.5 million. 

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