U.S. Stocks Lower as Fed Meeting and Retail Sales Take Center Stage

U.S. stock index futures traded lower on Tuesday as investors exercised caution ahead of this week’s Federal Reserve meeting, where the central bank is expected to cut rates at a slower pace of easing.

Last day Dow Jones futures were down 110 points, or 0.3%, S&P 500 futures were down nearly 10 points, or 0.2%, while Nasdaq 100 futures were up 6 points, or 0.1%.

Major tech stocks extended their recent rally on Monday, pushing the Nasdaq Composite to record highs. However, the Dow lagged behind, marking its eighth consecutive session in the red—the longest streak since June 2018.

Fed Rate Cut and Outlook in Focus

The Federal Reserve is widely anticipated to cut interest rates by 25 basis points at the conclusion of its two-day meeting on Wednesday.

Although the rate cut is largely priced into the market, considerable attention will center on the Fed’s outlook for rates in 2025.

Investors are preparing for the central bank to signal a slower pace of easing next year amid persistent inflation and a robust labor market—two of the key challenges for policymakers.

Goldman Sachs analysts highlighted in a recent note that they do not expect a rate cut in January and anticipate that the Fed will proceed with a slower rate reduction schedule throughout next year.

According to CME FedWatch, the probability that the Fed will leave rates unchanged at its January meeting stands at approximately 81.9%.

Beyond the Fed meeting, retail sales data and industrial production figures, both due on Tuesday, are also in focus.

Technology Sector Remains in the Spotlight

The technology sector is likely to maintain investor interest on Tuesday, with the prospect of lower near-term rates continuing to buoy heavyweight stocks such as Apple (AAPL), Amazon (AMZN), and Alphabet (GOOGL).

However, Nvidia (NVDA) bucked the trend, with the chipmaker’s shares falling more than 10% from their peak, entering correction territory.

Meanwhile, cryptocurrency-focused stocks such as Coinbase Global (COIN) and MicroStrategy (MSTR) extended their gains as Bitcoin surged past $107,000.

Crude Oil Prices Retreat Ahead of Fed Meeting

Crude oil prices retreated on Tuesday, hit by profit-taking ahead of the Federal Reserve’s latest monetary policy meeting.

Crude oil prices are falling from multi-week highs seen the previous week as weak retail sales data from China on Monday prompted profit-taking as investors fretted about the health of the world’s second-largest economy.

Traders are still awaiting the Federal Reserve meeting, reluctant to take sizable positions ahead of a potentially market-moving event.