US stocks took a dip on Tuesday as the Federal Reserve kicked off its last policy meeting of the year, with investors watching closely for the outcome. A quarter-point interest rate cut is widely expected when the meeting wraps up on Wednesday, but strong November retail sales data has slightly dampened confidence in that decision.
Here’s a quick rundown of what’s happening:
• Retail Sales Beat Expectations: November’s retail sales were stronger than predicted, driven by robust consumer spending on vehicles, electronics, and health products. This hints at a strong economy and resilient consumers.
• Rate Cut Odds Trimmed: While markets are still 95% confident in a 0.25% rate cut, it’s a slight drop from near certainty earlier in the day. Economic strength could lead the Fed to slow future rate cuts.
• Key Indexes Decline:
• S&P 500: Down 0.35% to 6,052.60
• Dow Jones: Dropped 0.56% (-244 points) to 43,472.92
• Nasdaq: Fell 0.33% to 20,109.68
US stocks took a dip on Tuesday as the Federal Reserve kicked off its last policy meeting of the year, with investors watching closely for the outcome. A quarter-point interest rate cut is widely expected when the meeting wraps up on Wednesday, but strong November retail sales data has slightly dampened confidence in that decision.
Here’s a quick rundown of what’s happening:
• Retail Sales Beat Expectations: November’s retail sales were stronger than predicted, driven by robust consumer spending on vehicles, electronics, and health products. This hints at a strong economy and resilient consumers.
• Rate Cut Odds Trimmed: While markets are still 95% confident in a 0.25% rate cut, it’s a slight drop from near certainty earlier in the day. Economic strength could lead the Fed to slow future rate cuts.
• Key Indexes Decline:
• S&P 500: Down 0.35% to 6,052.60
• Dow Jones: Dropped 0.56% (-244 points) to 43,472.92
• Nasdaq: Fell 0.33% to 20,109.68
What It Means for Investors
The strong retail data showcases a solid economy, but it complicates the Fed’s path for future rate cuts. Investors should stay cautious as inflation trends and economic resilience may shape 2025’s monetary policy outlook.