U.S. stocks retreated on Tuesday as investors remained cautious ahead of the Federal Reserve’s final policy announcement of the year. The Dow Jones Industrial Average suffered its ninth straight daily decline, its longest losing streak since 1978, while the Nasdaq hit a record high on Monday.
The economic data indicating consumer spending remained solid buoyed U.S. retail sales, which increased more than expected in November, driven by an acceleration in motor vehicle purchases. The Fed’s policy announcement is expected on Wednesday, with investors pricing in an interest rate cut of 25 basis points. The attention will be on the Fed’s summary of economic projections and comments from Chair Jerome Powell, which may indicate how aggressive the U.S. central bank will be in cutting rates in 2025.
The stock market retreated as a whole, with the S&P 500 falling 0.39% and the Dow falling 0.61%. The Nasdaq dropped 0.32%. Ten of the 11 major S&P sectors were lower, with consumer discretionary the sole advancer. The small-cap Russell 2000 was hit hard, dropping 1.2%, as the “fear gauge” rose above 15 for the first time in nearly three weeks.
Among individual stocks, Tesla shares rose 3.6% after price target increases from Mizuho and Wedbush. Pfizer jumped 4.7% after forecasting 2025 profit roughly in line with Wall Street expectations.
Declining issues outnumbered advancers on the NYSE and Nasdaq, and the number of stocks making new highs and lows was also largely negative. Trading volume was higher than average, indicating increased uncertainty ahead of the Fed’s announcement.