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Stock market today: Indexes slip as the last Fed meeting of the year kicks off
US stocks dropped on Tuesday as investors braced for the Federal Reserve's last policy decision of the year.
The Fed's two-day meeting starts Tuesday, with markets strongly convinced it will deliver 2024's final interest rate cut on Wednesday. The CME FedWatch Tool shows the odds of a 25 basis point cut stand at 95.4%.
That's down slightly from near-100% odds priced in on Tuesday. The market adjusted its view after parsing through newly-released retail sales data. November sales were better than expected, led higher by vehicle purchases and broad-based consumer strength.
"The consumer is alive and well. When the labor market is strong and households are not extended, people spend," wrote Scott Helfstein, Global X head of investment strategy. There were gains in almost every category from electronics & appliances to health & personal care. Companies needed strong topline sales to meet expectations and this is a good sign."
Underlying consumer strength signals that the economy remains robust, which may reduce pressure on the Fed to hurry with further rate cuts in the coming months. In fact, economic strength and shifting inflation trends have muddied dovish outlooks for 2025 among some economists.
The odds that the Fed pauses rate cuts at its January meeting have crept up steadily, sitting at almost 80% on Tuesday, up from about 70% a week ago.
Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Tuesday:
Here's what else is happening today:
In commodities, bonds, and crypto:
Read the original article on Business Insider