This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

More hikes, but slower
Almost all Federal Reserve members expect more interest rate hikes at upcoming Federal Open Market Committee meetings, according to minutes of June's meeting. However, most favored a slower pace of hikes. Prior to the June meeting, the Fed had raised rates for 10 consecutive times, with four of them being 0.75 percentage point increases.

Minutes muting markets
U.S. stocks lost ground on Wednesday, the first full trading day this week, as investors digested the Fed minutes. Futures were flat, while the 10-year Treasury yield jumped more than 7 basis points to 3.934%. European markets traded lower too. The benchmark Stoxx 600 dropped 0.7% as factory production in the euro zone fell sharply in June.

Way too hot
The average temperature on Earth on Tuesday, July 4 hit 17.18 degrees Celsius (62.9 degrees Fahrenheit) — the hottest day on Earth ever recorded, according to the University of Maine's Climate Reanalyzer. It coincided with the start of El Niño, a weather phenomenon that is associated with warmer ocean water. Scientists warn that 2024 could be the first year the planet's temperature rises 1.5 degrees Celsius above pre-industrial levels.

Threads vs Twitter
Meta officially launched Instagram Threads, its "text-based conversation app," on Wednesday. Threads is a Twitter-like messaging app in which users can use their existing Instagram usernames to post short messages and follow other people. The release of Threads seems timely — Twitter recently limited the number of posts users can view per day, drawing complaints from many Twitter users.

[PRO] Wider rally
The surge in major stock indexes during the first half of the year was largely driven by a handful of Big Tech stocks, raising alarm in analysts who warned that the rally was too narrow. That concern may dissipate soon — Bank of America expects the rally to extend to more stocks later this year. Here are BofA's stock picks for the third quarter.

The bottom line

After a year of fighting the Fed, investors, it seems, are starting to listen to what the central bank has to say.

Minutes from June's FOMC meeting showed further rate hikes are in store for the U.S. economy. All but two of the 18 voting Fed officials expected at least one more hike this year, while 12 expected two or more, wrote CNBC's Jeff Cox.

Investors used to bet last year that the Fed would cut rates despite its hawkish rhetoric. This time, they took the Fed's words at face value. Investors are now betting that there's a 90.5% chance the Fed will raise rates by 25 basis points at its July 26 meeting, according to the CME FedWatch Tool. That's up from 81.8% a week ago.

Markets fell in response. The S&P 500 slipped 0.2%, the Dow Jones Industrial Average lost 0.38% and the Nasdaq Composite declined 0.18%. Both the S&P and Dow broke their three-day winning streaks.

It's not all bad news in the Fed minutes, however. They showed that Fed officials are growing more optimistic that the U.S. could avoid a recession even as rates increase and economic activity slows.

"Given the continued strength in labor market conditions and the resilience of consumer spending, however, the staff saw the possibility of the economy continuing to grow slowly and avoiding a downturn as almost as likely as the mild-recession baseline," according to the minutes.

Look out for Friday's jobs report. That will be the key piece of data showing whether the economy can indeed land softly — or if the Fed will need to engineer a crash landing to stop inflation.