Stocks fell on Tuesday as investors braced for the Federal Reserve's upcoming monetary policy decision due out Wednesday afternoon. The Dow Jones Industrial Average fell over 300 points, while the S&P 500 Index and Nasdaq Composite declined 1% and 0.9%, respectively.
Here's how the market settled on Tuesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
The Federal Open Market Committee (FOMC) began its September policy-setting meeting on Tuesday, and is expected to issue a third-straight 75-basis-point interest rate hike on Wednesday. On Wednesday afternoon, market participants will also turn to remarks from Fed Chair Jerome Powell for further clues on the central bank's longer term plans to stabilize prices.
"A third 'usually large' hike would be a reversal from the plan Chair Powell laid out in July to slow the pace of tightening, despite little surprise on net in the data," said Jan Hatzius, economist at Goldman Sachs
"We see several reasons for the change in plan: the equity market threatened to undo some of the tightening in financial conditions that the Fed had engineered, labor market strength reduced fears of overtightening at this stage, Fed officials now appear to want somewhat quicker and more consistent progress toward reversing overheating, and some might have reevaluated the short-term neutral rate."
In other economic news, U.S. homebuilding increased in August, rebounding 12.2% to a seasonally adjusted annual rate of 1.575 million units, the Commerce Department reported Tuesday. This market the largest gain since March 2021, when starts gained 19.65%.
Meanwhile, building permits fell 10% in August to a seasonally adjusted annual rate of 1.517 million, the data's biggest decline since April 2020.
For stocks, Ford
The company now projects supply costs to total $1 billion and supply shortages to affect about 40,000 to 45,000 vehicles. Ford added that executives will "provide more dimension about expectations for full-year performance" when it reports its Q3 results in October.
