Wall Street’s three main stock indexes ended lower in choppy trading on Tuesday as caution set in ahead of an anticipated interest rate cut from the Federal Reserve.
Investors are largely still pricing in a 25 basis-point cut from the US central bank at the conclusion of its two-day meeting on Wednesday, to offset the deterioration in the US labor market, evidenced by numerous recent economic indicators.
Data on Tuesday showed that US retail sales increased more than expected in August, but that did little to change rate cut expectations.
“Any kind of resilient economic data will only reaffirm the hawks on the FOMC … and could give a little bit of fuel for (Fed Chair Jerome) Powell to come out as slightly more hawkish than the market is hoping for,” said Ross Mayfield, investment strategist at Baird Private Wealth Management.
Investors also brushed off news that the US Senate confirmed White House economic adviser Stephen Miran to the Fed Board and an appeals court rejected President Donald Trump’s bid to fire Fed Governor Lisa Cook.
The Dow Jones Industrial Average fell 125.55 points, or 0.27 percent, to 45,757.90, the S&P 500 (.SPX), lost 8.52 points, or 0.13 percent, to 6,606.76 and the Nasdaq Composite (.IXIC), lost 14.79 points, or 0.07 percent, to 22,333.96.
Six of the 11 S&P 500 subsectors ended lower. The utilities and real estate sectors fell 1.81 percent and 0.66 percent, respectively.
The CBOE Volatility Index climbed to its highest level in more than a week to 16.04 points.
UnitedHealth Group shares fell 2.3 percent and Nvidia shares dropped 1.6 percent, weighing on the Dow. Nvidia shares fell after Reuters reported, weak demand in China for its new AI chip.
The S&P 500 and the Nasdaq closed at all-time highs on Monday after hitting intraday records in multiple sessions. The three main indexes had gained so far in September – a month traditionally deemed bad for US equities.
Webtoon Entertainment soared 39 percent after a deal with Disney to create a new digital comics platform to feature content from Disney’s portfolio, including the Marvel and “Star Wars” franchises.
