Major U.S. indices traded in a tight range during Tuesday's session, with the S&P 500 reaching an intraday record high of 5,670.81 as market participants awaited the Federal Reserve's key interest rate cut decision.
The S&P 500 added just 0.03% to 5,634.58, the Dow Jones Industrial Average slipped by 15.9 points, or 0.04%, closing at 41,606.18, while the Nasdaq Composite advanced 0.2% to end at 17,628.06.
Among sectors, energy outperformed the S&P 500, gaining 1.3%. Notable movers included Halliburton, up 3.2%, and Devon Energy, which climbed 2.1%.
Meanwhile, the healthcare sector struggled, losing 1.1%, with Edwards Lifesciences, Cigna Group, and Molina Healthcare all seeing declines of around 3%.
Traders are navigating late-summer economic headwinds, including disappointing August jobs and manufacturing data, which caused a brief sell-off. However, more positive data releases and expectations of a Federal Reserve rate cut have helped equities rebound.
The Fed's anticipated rate cut, expected to be announced Wednesday afternoon, could support earnings growth for companies as it follows a period of steep borrowing costs and high inflation. The central bank has been raising rates since March 2022 in its ongoing battle against inflation.
Recent retail sales data suggested solid consumer health, with sales rising 0.1% in August, according to Dow Jones, compared to economists' expectations of a 0.2% decline. Excluding autos, sales also increased by 0.1%, although this fell short of the 0.2% forecast.
While investors anticipate a rate cut, the market is divided on its size. According to the CME Group's FedWatch Tool, traders are pricing in a 63% chance of a 50-basis-point cut.
On the bond markets, 10-year and 2-year rates were at 3.647% and 3.607%, respectively.
