Updated 2 min read
US stocks pulled back slightly from records on Tuesday as the Federal Reserve kicked off its September policy meeting.
The benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) fell less than 0.1%, while the Dow Jones Industrial Average (^DJI) dipped nearly 0.3%.
In an otherwise light week on economic data, on Tuesday, investors received the latest figures on retail sales showing strong consumer spending despite sticky inflation and a wobbly labor market. Retail sales in August rose 0.6% from the prior month, more than the 0.2% expected.
In other news, the Senate narrowly confirmed Stephen Miran, President Trump’s Fed pick, in a 48-47 vote on Monday evening — a day before the central bank’s policy meeting kicks off Tuesday. The move has put Miran in place just in time to cast a crucial vote on the direction of interest rates.
Though Miran has said he would act independently, his intention to take a leave of absence — but not resign — from his current role as a White House advisor has raised questions about the future of Fed independence, especially as Trump pursues firing Fed governor Lisa Cook.
On Monday, the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) climbed to new record highs. US-China trade talks and anticipation Fed officials will announce a rate cut at its next meeting boosted sentiment.
Tesla (TSLA) stock rose 1% on Tuesday morning after wiping out its year-to-date losses on Monday following CEO Elon Musk purchased shares of the EV maker for the first time since 2020. Oracle (ORCL) added to Monday’s gains as CBS News reported that the company was among a consortium of firms included in a US-China TikTok deal.
But the main event of the week lands Wednesday when the Fed will announce its decision on rates. Markets are confident policymakers will cut rates due to a slowdown in the labor market, despite persistently sticky price increases. Traders currently see a 96% chance of a 25 basis-point cut and a 4% chance of a jumbo reduction.
On Friday, Trump and Chinese President Xi Jinping are expected to discuss trade and a new framework for a TikTok deal.
LIVE 6 updates
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Novo Nordisk shares rise as drugmaker plans to seek US approval for obesity shot
Novo Nordisk stock rose more than 2% Tuesday as the Ozempic and Wegovy maker said it plans to apply for US approval for a high dose obesity shot.
Novo Nordisk chief scientific officer Martin Holst Lange remarked on the company’s plans to seek approval from the Food and Drug Administration for the high dose version of its weight loss shot Wegovy during the European Association for the Study of Diabetes conference in Vienna, Bloomberg reported.
Also boosting shares, the Danish drugmaker’s medication for diabetes, Rybelsus, became the first pill version of a GLP-1 drug approved by European regulators to reduce the risk of cardiovascular disease, Barron’s reported Monday.
Even with Tuesday’s gain, shares in the pharmaceutical giant are down 34% for the year.
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S&P 500, Nasdaq inch higher at the open
The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) nudged higher on Tuesday after climbing to fresh records during the previous trading session.
The benchmark S&P 500 edged less than 0.1% higher at the open, and the Nasdaq(^IXIC) rose around 0.2%. The Dow Jones Industrial Average (^DJI) fell more than 0.1%.
The gains Tuesday come after the Senate confirmed President Trump’s pick, Stephen Miran, as a Federal Reserve board governor and a retail sales update showed consumers staying resilient despite a weakening labor market and continued inflation.
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Retail sales top forecasts in August
Americans just keep spending.
Retail sales in August rose 0.6% from the prior month, more than the 0.2% expected and the latest sign that US consumers continue to be resilient in the face of a labor market that has shown some signs of stress.
Excluding spending on cars and gas, sales rose 0.7% last month.
The largest category increases were seen in spending at clothing stores and nonstore retailers — which captures e-commerce spending — suggesting a strong back-to-school shopping season. The retail sales data is not adjusted for inflation.
“Net, net, the consumer hasn’t pulled the plug on the economy yet,” said Chris Rupkey, chief economist at FWDBONDS, “and until they do, growth will continue to chug along at a moderate pace that seems to defy gravity in the face of rising tariff costs and store-bought prices.”
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Good morning. Here’s what’s happening today.
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Treasurys race past peers on cusp of new Fed easing cycle
US Treasurys are leading global bond markets this year as expectations of a Federal Reserve rate cut overturn bearish sentiment.
Bloomberg News reports:
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Gold reaches new record with Fed decision fast approaching
Bloomberg reports:
