The Dow fell from its record high and snapped a seven-day winning streak on Tuesday ahead the Federal Reserve’s upcoming policy announcement.
The Dow Jones Industrial Average fell about 129 points, or 0.4%, to 32,825.95.
The S&P 500 slipped 0.2% after setting a record high intraday and finished at 3,962.71, while the tech-heavy Nasdaq Composite clung to a gain of about 0.1% to close at 13,471.57.
The S&P 500 and Dow are still close to record highs, but there’s growing concern among investors that interest rates may continue to climb, snuffing out the comeback for equities. The market fell to its session lows when the benchmark 10-year Treasury yield briefly rose above 1.62% in afternoon trading.
Traders will get more guidance from the Federal Reserve on rates and inflation on Wednesday. The central bank kicks off its two-day meeting on Tuesday, followed by a statement and briefing from Chairman Jerome Powell the following day.
February retail sales fell by more than expected, down 3%, data released Tuesday showed, reflecting in part a month marked by severe weather across the United States. However, January’s retail sales figures was revised upward to a 7.6% jump from a 5.3% increase, so the markets largely ignored the number.
The calm in stocks on Tuesday was reflected in the Cboe Volatility Index, which fell below 20 and hit its lowest level since February of last year. The index measure the size of expected future price moves for stocks implied by options pricing.
The VIX was recently down 0.54 points at 19.49, its lowest since Feb. 21, 2020, days before the World Health Organization declared the coronavirus outbreak a global pandemic.
Reference: CNBC, Reuters
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