US stocks drifted lower on Tuesday, retreating from record highs as investors waited for the start of a Federal Reserve meeting that should signpost the path of interest rates.
The S&P 500 (^GSPC) fell 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) dropped roughly 0.2% on the heels of both notching all-time closing highs. The Dow Jones Industrial Average (^DJI) dropped 0.4%.
Stocks have managed to make headway amid market uncertainty about an economy that may be too hot or too cold for comfort. A string of inconclusive data has fueled skepticism about the likelihood of three rate cuts in 2024, as envisaged by the Fed in March. Many investors now predict just one reduction before the year’s end.
The two-day Fed policy meeting that kicks off Tuesday is heavily expected to end with borrowing costs kept at their two-decade high. Investors will still watch out for hints on when a shift to cuts will come, with September or November in the frame.
Read more: How does the labor market affect inflation?
Investors calculating the rate-reduction odds are also looking ahead to May consumer price data due out on Wednesday, given its crucial role in the Fed’s deliberations.
In individual stocks, Apple (AAPL) shares were little changed following losses from the prior session after the iPhone maker’s big AI debut. Meanwhile, Eli Lilly (LLY) shares popped after the drugmaker’s early-stage Alzheimer’s treatment got unanimous backing from a panel of FDA advisers.
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