Filip De Mott
Indexes were mixed Tuesday after the S&P 500 touched a fresh record high intraday.
Investors are waiting for the Federal Reserve's interest rate decision on Wednesday.
Tuesday's retail sales data boosted soft landing outlooks.
Indexes were mixed on Tuesday with investors still split on the potential size of an interest rate cut, with less than 24-hours to go before the Federal Reserve announces its policy decision.
Unanticipated strength in Tuesday's retail sales data convinced investors that the economy remains robust, and the S&P 500 briefly hit a record high before paring gains. Risk assets also gained, with bitcoin notching its largest intraday jump in more than a month.
According to the CME FedWatch Tool, investors are pricing in 65% odds that the Fed will deliver a half-point cut at 2 p.m. on Wednesday.
Bond yields edged up ahead of the Fed decision, nodding to the possibility that the odds of a jumbo rate cut fell after retail sales surprised to the upside. The 10-year Treasury bond yield rose two basis points to 3.646%.
Strong retail sales suggest that the Fed does not necessarily have to hurry with larger cuts, as the consumer economy appears intact for now. But in recent months, previous data — especially related to labor — has also hinted at a slowdown.
"The Fed is dealing with mixed signals as they debate how much to cut rates," LPL Financial's chief economist Jeffrey Roach said. "Consumer spending is growing despite early signs of labor market weakness, so the Fed may end up falling behind the curve again if they rely too much on stale data and not enough on the forward-looking outlook."
Here's where US indexes stood at the 4:00 p.m. closing bell on Tuesday:
S&P 500: 5,634.58, up 0.03%
Dow Jones Industrial Average: 41,606.18, down 0.04% (-15.90 points)
Nasdaq composite: 17,628.06, up 0.2%
Here's what else is going on:
US federal debt is the largest de-dollarization threat, experts told JPMorgan.
Investors are piling into defensive plays as fears of an economic slowdown rise.
Fed rate cuts might not even be warranted, a JPMorgan analyst said.
New home sales notched their biggest burst in activity since 2022, Mortgage Bankers Association says.
$2 billion worth of Russian oil products are being passed on to the West through middlemen, a think tank says.
In commodities, bonds, and crypto:
WTI crude increased 1.81% to $71.36 a barrel. Brent crude, the international benchmark, jumped 1.51% to $73.84 a barrel.
Gold slid 0.54% to $2,594.8 an ounce.
The 10-year Treasury yield rose two basis points to 3.646%.
Bitcoin climbed 3.63% to $60,038.
