S&P 500 eases a bit from record as traders await big Fed rate decision

Stocks edged slightly lower on Tuesday as investors took some profits ahead of a highly-awaited Federal Reserve interest rate decision

The S&P 500 traded 0.13% lower to close at 6606.76, after hitting a fresh record earlier in the session. The Nasdaq Composite lost 0.07% to finish the session at 22,333.96. The Dow Jones Industrial Average dropped 125.55 points, or 0.27%, to close at 45,757.90.

Key bull market leaders declined, with shares of Nvidia and Microsoft losing 1.6% and 1.2%, respectively. Palantir and Google parent Alphabet also pulled back.

The two-day Fed meeting, which kicked off on Tuesday, is expected to result in a rate cut for the first time since December. Interest rate futures are pricing in a 100% certainty of at least a quarter-point rate cut, according to the CME’s FedWatch tool. What investors are watching most is the central bank’s forecast for rates for the rest of the year and whether voting members are expecting one more additional cut or two more before 2025 ends.

Traders will also closely monitor Fed Chair Jerome Powell’s subsequent press conference for any clues on the future of monetary policy. The meeting also comes with some political tension, after the Senate confirmed President Donald Trump’s pick to join the central bank, Stephen Miran. The president is also attempting to remove Fed Governor Lisa Cook, who is voting at the meeting with Miran.