Wall Street closed lower on Tuesday, eagerly awaiting the Fed meeting. Market participants showed restraint in trading ahead of the Fed’s last policy announcement of 2024 after economic data released on the day suggested that consumer spending was going up. The three most widely followed indexes closed the session in the red.
The Dow Jones Industrial Average (DJI) ticked down 266.93 points, or 0.6%, to close at 43,450.55. Twenty components of the 30-stock index ended in negative territory, Nine ended in positive, while one was unchanged. For the Dow, this was a ninth straight session of decline.
The tech-heavy Nasdaq Composite fell 64.83 points, or 0.3%, to close at 20,109.06.
The S&P 500 lost 23.45 points, or 0.4%, to close at 6,050.63. Ten of the 11 broad sectors of the benchmark index closed in the red. The Industrials Select Sector SPDR (XLI), the Communication Services Select Sector SPDR (XLC) and the Energy Select Sector SPDR (XLE) declined 0.9%, 0.8% and 0.7%, respectively, while the Consumer Discretionary Select Sector SPDR (XLY) advanced 0.3%.
The fear-gauge CBOE Volatility Index (VIX) increased 8% to 15.87. A total of 16.2 billion shares were traded on Tuesday, higher than the last 20-session average of 14.1 billion. Decliners outnumbered advancers by a 2.77-to-1 ratio on the NYSE, while on the Nasdaq Composite, declining issues had an 1.79-to-1 advantage.
While the markets have completely priced in another 25 basis point rate cut decision by the Fed to be announced from its December meet on Wednesday, a general consensus among investors is that there will be a rate-cut pause January onward.
It is highly unlikely, with the economic indicators being where they are, that the central bank would continue to cut rates before inflation numbers are favorable. Tuesday’s trade kind of mirrored a standard fare for a pre-Fed day market where the outlook is little uncertain, yet market participants are broadly aware what the Fed Chair’s guidance is going to be like.
Consequently, there was a broad-based slowdown evident in trading. Shares of Broadcom Inc. AVGO and Moderna, Inc. MRNA fell 3.9% and 2.6%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per the U.S. Census Bureau, advance estimates of U.S. retail and food services sales for November 2024 came in at $724.6 billion, up 0.7% from October. The October number was revised up to 0.5% from the previously reported 0.4%.
