U.S. stocks fall away from records as focus turns to Fed

U.S. stocks drifted lower on Tuesday, moving away from record highs as investors awaited the start of a Federal Reserve meeting that is expected to outline where interest rates will move.

The S&P 500 (^GSPC) fell 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) fell about 0.2% on the heels of both all-time closing highs. The Dow Jones Industrial Average (^DJI) fell 0.4%.

Stocks have managed to advance amid market uncertainty about an economy that could be too hot or too cold for comfort. A string of inconclusive data has fueled skepticism about the likelihood of three rate cuts in 2024, as the Fed considered in March. Many investors now expect just one reduction before the end of the year.

The Fed’s two-day policy meeting that begins Tuesday is expected to end with borrowing costs held at their highest level in two decades. Investors will keep an eye out for clues on when a shift to cuts will take place, with September or November in the frame.

Learn more: How does the labor market affect inflation?

Investors calculating the odds of a rate cut are also eagerly awaiting May consumer price data, due Wednesday, given its crucial role in the Fed’s deliberations.

Looking at individual stocks, shares of Apple (AAPL) were little changed following losses the previous session after the iPhone maker’s big AI debut. Meanwhile, shares of Eli Lilly (LLY) jumped after the pharmaceutical maker’s early-onset Alzheimer’s treatment gained unanimous support from a panel of FDA advisers.

Live2 updates

  • Stocks fall as market eyes Fed meeting

    Stocks opened lower Tuesday as the Federal Reserve prepares to kick off its two-day policy meeting.

    The S&P 500 (^GSPC) fell about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) fell slightly on the heels of both indexes’ new all-time closing highs. The Dow Jones Industrial Average (^DJIA) was down 0.4%.

    The major averages managed to rise slightly despite uncertainty about the economy and reduced expectations for rate cuts. Most investors expect the Federal Reserve to cut rates just once before the end of the year.

    On Wednesday afternoon, the Federal Open Market Committee (FOMC) is expected to announce its policy decision following a two-day meeting. Monthly inflation data will also be released on Wednesday, before the market opens.

    Shares of Apple (AAPL) gained about 2% in early trading, reversing losses from the previous session that followed the iPhone maker’s introduction of AI features at its Worldwide Developers Conference on Monday .

    Cryptocurrency-related stocks opened lower on Tuesday as bitcoin (BTC-USD) fell to its lowest level in a week, trading just above $69,000 per token. Coinbase (COIN), Marathon Digital (MARA), and MicroStrategy (MSTR) were all down more than 3% in early trading.

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