Wall Street’s main indexes showed little movement on Tuesday as investors awaited further insights into Federal Reserve policy and potential tariff developments.
This cautious approach followed last week’s data revealing a decline in retail sales, which heightened speculation over the Fed’s future interest rate decisions.
Fed Policy in Focus
The Federal Reserve’s January meeting minutes are set for release on Wednesday, with investors keenly analyzing potential shifts in monetary policy. On Monday, Fed Governor Christopher Waller expressed that President Trump’s new trade restrictions would likely have only a modest impact on inflation. Meanwhile, Philadelphia Fed President Patrick Harker advocated for maintaining steady interest rates.
Uncertainty in Rate Cut Expectations
Mixed economic data, including weaker-than-expected retail sales and retreating Treasury yields, have fueled uncertainty regarding the Fed’s stance on borrowing costs. Traders currently predict at least one 25-basis-point rate cut by year-end, with a 54% chance of an additional cut, according to LSEG data.
“I don’t think the Fed wants a policy mistake by cutting rates too early, because if they do, the unintended consequence would certainly be that inflation would turn around,” said Philip Blancato, CEO of Ladenburg Thalmann Asset Management.
Market Movers and Sector Performance
As of 09:57 a.m. ET, the Dow Jones Industrial Average fell by 99.35 points (0.22%) to 44,444.83, while the S&P 500 gained 5.87 points (0.10%) to 6,120.62. The Nasdaq Composite also advanced by 33.71 points (0.17%) to 20,060.48.
Among S&P 500 sectors, communication services led declines with a 0.9% drop, while technology gained 0.5%. Notable stock movements included a 2.2% dip in UnitedHealth and a 6.6% rise in Intel following reports of potential restructuring efforts.
Meanwhile, global markets were influenced by speculation over a possible peace deal between Russia and Ukraine, as officials from both nations held talks in Saudi Arabia.