United States stocks fell sharply on Tuesday as the market sell-off resumed after a brief two-day rebound, with investors remaining cautious ahead of the Federal Reserve’s policy decision.
The Dow Jones Industrial Average dropped 260.3 points, or 0.6%, closing at 41,581.3. The S&P 500 lost 1.1% to end at 5,614.7, while the Nasdaq Composite declined 1.7% to settle at 17,504.1.
Tesla, which has been among the hardest-hit stocks in the recent market downturn, fell more than 5% after RBC Capital Markets cut its price target, citing increased competition in the electric vehicle sector. The stock has now declined over 36% in the past month.
Other tech stocks also struggled, with Meta Platforms shedding 3.7%, Apple down 0.6%, and Nvidia falling 3.4%.
Tuesday’s declines followed two consecutive winning sessions on Wall Street, which had provided some relief after weeks of volatility. However, ongoing concerns over soft economic data and the uncertain impact of President Donald Trump’s shifting tariff policies continue to weigh on investor sentiment.
The S&P 500 briefly entered correction territory last week but managed to recover some losses on Friday and Monday. Despite this rebound, the Nasdaq remains in correction - a term used to describe a drop of at least 10% from a recent peak.
All three major indices remain down for the year, reflecting the strength of the broader market downturn.
Attention now turns to the Federal Reserve, which began its two-day policy meeting on Tuesday. Investors are closely watching Wednesday’s interest rate decision and Fed Chair Jerome Powell’s press conference for insights into future monetary policy.
According to the CME FedWatch Tool, traders are pricing in a 99% probability that the central bank will hold rates steady.
On the bond markets, the yield on the 10-year Treasury note fell 0.3% to 4.287%, while the 2-year Treasury yield declined 0.1% to 4.044%.
