U.S. stocks fell on Tuesday, slipping from record highs as investors waited for the Federal Reserve to start meeting, which is expected to indicate the direction of interest rates.
The S&P 500 (^GSPC) fell 0.3%, and the tech-heavy Nasdaq Composite Index (^IXIC) dropped about 0.2% after both indexes closed at all-time highs. The Dow Jones Industrial Average (^DJI) fell 0.4%.
The stock market has managed to rally amid worries that the economy is overheating or overcooling, and a string of inconclusive data has raised doubts about the possibility of three interest rate cuts in 2024 that the Fed envisaged in March. Many investors now expect just one rate cut by the end of the year.
The two-day Fed policy meeting that starts on Tuesday is expected to finish with borrowing costs at their highest in two decades, and investors will continue to watch for hints as to when a shift to rate cuts might occur, with September or November in sight.
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Investors gauging the likelihood of a rate cut are also keeping a close eye on the release of May’s consumer price index on Wednesday, as it will play a key role in the Fed’s deliberations.
Among individual stocks, iPhone maker Apple (AAPL) shares were little changed from a day earlier’s drop following the company’s AI debut, while pharmaceutical company Eli Lilly (LLY) shares surged after its early-stage Alzheimer’s treatment won unanimous support from FDA advisers.
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