United States benchmarks eased on Tuesday (Wednesday AEST) as investors took profits after a fresh round of record highs and positioned ahead of a much-anticipated Federal Reserve interest-rate decision.
The Dow Jones Industrial Average fell 125.3 points or 0.3% to close at 45,757.9, the S&P 500 fell 8.5 points or 0.1% lower to finish at 6,606.8, while the Nasdaq Composite slipped 14.8 points or 0.1% to close at 22,334.0.
Six of the 11 S&P 500 sectors ended the session in the red, with Utilities and Real Estate leading declines, down 1.8% and 0.7% respectively.
Nvidia shares fell 1.6% after Reuters reported weaker demand in China for the company’s new AI chip.
By contrast, Oracle rose 1.5% following reports that the firm is part of an investor consortium linked to a deal that would allow TikTok to continue operating in the United States.
Market attention was firmly on the two-day Fed meeting that began on Tuesday, which is widely expected to culminate in the central bank’s first rate cut since December.
Interest-rate futures put 100% probability on at least a quarter-point cut, according to the CME Group FedWatch Tool.
What investors will scrutinise most is the Fed’s updated path for rates through the remainder of the year and whether voting members signal one further cut or two before the end of 2025.
Traders will also look closely to Fed Chair Jerome Powell’s press conference for guidance on the outlook for monetary policy.
The meeting carries an added element of political tension after the Senate confirmed President Trump’s nominee, Stephen Miran, to the central bank. Trump is simultaneously attempting to remove Fed Governor Lisa Cook, who is voting at the meeting alongside Miran.
On the bond market, yields moved lower, with the 10-year and two-year Treasury rates down 0.2% and 0.8% respectively to 4.032% and 3.51%.
