U.S. stocks ended lower on Tuesday in a choppy trading session, as investors remained cautious ahead of the Federal Reserve’s decision on interest rates at the end of its two-day policy meeting on Wednesday. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) shed 0.3% or 125.55 points, to end at 45,757.90 points.
The S&P 500 declined 0.1%, or 8.52 points, to finish at 6,606.76 points, after hitting an all-time closing high in the previous session. Utilities and real estate stocks were the worst performers.
The Utilities Select Sector SPDR (XLU) lost 1.8%. The Technology Select Sector SPDR (XLK) and the Real Estate Select Sector SPDR (XLRE) fell 0.4% and 0.6%, respectively. Eight of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 0.1%, or 14.79, to close at 22,333.96, slipping from its all-time high attained in the previous session.
The fear gauge CBOE Volatility Index (VIX) was up 4.27% to 16.36. Advancers outnumbered decliners on the NYSE by a 1.07-to-1 ratio. On the Nasdaq, a 1.01-to-1 ratio favored advancing issues. A total of 17.11 billion shares were traded on Tuesday, higher than the last 20-session average of 16.31 billion.
On the Nasdaq, there were 89 new highs and 58 new lows. On the S&P 500, there were 15 new 52-week highs and 13 new lows.
Investors Cautious Ahead of Fed Decision on Rates
Tuesday saw a choppy trading session, as investors maintained caution and took some profits ahead of the Federal Reserve’s decision on rate cuts. Markets are pricing in a 100% chance of a quarter percentage point rate cut at the end of the Federal Open Market Committee’s (FOMC) two-day meeting on Wednesday, according to the CME’s FedWatch tool.
Investors are more eager to hear from Federal Reserve Chairman Jerome Powell at the post-meeting press conference, which is expected to give them a clearer view of the central bank’s monetary policy in the coming months.
Investors are presently more interested in knowing whether the central bank will go for two more rate cuts this year or will settle for one.
The uncertainty of the future rate cuts weighed on major indexes as shares retreated from their earlier highs. Shares of UnitedHealth Group Incorporated (UNH) declined 2.3%. Shares of NVIDIA Corporation (NVDA) also ended the day 1.6% lower. NVIDIA has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Investors also closely watched some developments on the political front. The U.S. Senate confirmed President Donald Trump’s pick, White House economic adviser Stephen Miran, for the Federal Reserve board. However, an appeals court rejected Trump’s bid to ouster Fed governor Lisa Cook from the board.
Economic Data
The retail sales data came just a day ahead of the Fed’s decision on rate cuts. The Commerce Department said that retail sales rose 0.6% in August, surpassing analysts’ expectations of a rise of 0.3%. Year over year, retail sales rose 5%.
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UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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