The Dow Jones Industrial Average has experienced a decline for the ninth consecutive day as the Federal Reserve began its two-day monetary policy meeting, with traders assessing the latest economic data. The Dow fell 0.6% to 43,449.9 on Tuesday, while the S&P 500 decreased by 0.4% to 6,050.6. The Nasdaq Composite saw a loss of 0.3%, closing at 20,109.1, stepping back from Monday's record finish.
All sectors, except for consumer discretionary, closed in the red, with industrials leading the declines. Market participants generally anticipate that the Federal Open Market Committee will announce a quarter-percentage-point reduction in the benchmark lending rate on Wednesday, as indicated by the CME FedWatch tool.
This would follow a consecutive 25-basis-point decrease that occurred after a more significant 50-basis-point cut in September. The updated economic projections will accompany the latest rate decision. Fed Chair Jerome Powell is expected to address the importance of a slower pace of easing moving forward, the uncertainty surrounding the neutral rate, and the data-driven nature of monetary policy, as noted by Macquarie in an email to clients on Tuesday. Yields on the US 10-year and two-year Treasury notes remained stable at 4.40% and 4.25%, respectively. On the economic front, retail sales in the US surged at a faster-than-anticipated pace last month, propelled by increased spending on automobiles, according to data from the Census Bureau. US industrial production, however, experienced a decline for the third month in a row in November, despite a rebound in the manufacturing sector, as reported by the Fed. Desjardins commented, "Except for the positive news in the automotive sector, November's retail sales and industrial production figures were lackluster at best." Homebuilder confidence in the US remained steady in December, influenced by high prices and elevated mortgage rates, which tempered renewed optimism about a more favorable regulatory environment in the coming year.
This data was disclosed by the National Association of Home Builders and Wells Fargo. West Texas Intermediate crude oil dropped 0.8% to $70.16 per barrel on Tuesday, with oil prices declining due to renewed worries about demand from China, stated D.A. Davidson in a note to clients. In terms of corporate news, Amentum ($AMTM) shares fell by 9.6%, marking the second-sharpest drop on the S&P 500.
The company reported its fiscal fourth-quarter pro forma non-GAAP net income and revenue declined year-over-year late Monday. In contrast, Pfizer ($PFE) emerged as the best performer on the S&P 500 for Tuesday, rising by 4.7% after the pharmaceutical company projected higher earnings for 2025, with revenue expected to align with this year's predicted results as it aims for "disciplined execution" and cost reductions. Furthermore, Teva Pharmaceutical Industries' ($TEVA) US affiliate, along with partner Sanofi ($SAN), announced that a phase 2b study of Teva's investigational drug duvakitug for treating ulcerative colitis and Crohn's disease met its primary endpoints.
Consequently, shares of Israel's Teva surged nearly 27%, while shares of French firm Sanofi increased by 6.7%. Gold prices fell 0.3% to $2,661.30 per troy ounce, with silver dipping 0.2% to $31 per ounce..