U.S. stock markets closed mixed on Tuesday ahead of the Fed’s crucial FOMC meeting decisions. Major indexes were little changed as market participants were busy guessing the central bank’s decision regarding future movement of the interest rate. Investors also digested a few strong key economic data. The S&P 500 and the Nasdaq Composite ended in positive territory while the Dow finished in negative zone. 

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) was down 0.04% to close at 41,606.18. In intraday trading, the blue-chip index touched an all-time high of 41,835.28. Notably, 22 components of the 30-stock index ended in positive territory while 8 in negative zone. The index ended a four-day winning run. 

Major loser of the Dow was Walmart Inc. (WMT Quick QuoteWMT - Free Report) . The stock price of this retail supermarket behemoth dropped 2.4%. Walmart currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The tech-heavy Nasdaq Composite finished at 17,628.06, rising 0.2% due to strong performance by technology giants. The S&P 500 was up 0.03% to finish at 5,634.58. Wall Street’s benchmark is currently less than 1% below its all-time high recorded in July. In intraday trading, the broad-market index touched an all-time high of 5,670.81. The index also registered a seven-day winning-streak. 

Five out of 11 broad sectors of the broad-market index ended in positive territory while five in negative zone and one remained unchanged. The Energy Select Sector SPDR (XLE) advanced 1.4%. while the Heath Care Select Sector SPDR (XLV) and the Consumer Staples Select Sector SPDR (XLP) tanked 1% each. 

The fear-gauge CBOE Volatility Index (VIX) was up 2.7% to 17.61. A total of 10.23 billion shares were traded on Tuesday, lower than the last 20-session average of 10.74 billion. Advancers outnumbered decliners on the NYSE by a 1.55-to-1 ratio. On Nasdaq, a 1.25-to-1 ratio favored advancing issues.

Fed’s September FOMC Meeting in Focus

The Fed will conduct its next FOMC meeting on Sept. 17-18. Market participants are currently riding on high expectations of the beginning of the interest rate cut regime by the Fed in the September FOMC meeting scheduled next week. The existing range of 5.25-5.5% marks a 23-year high level. If the Fed initiates a rate cut, it will be the first one since March 2020, at the onset of COVID-19.

Economic Data

The Department of Commerce reported that retail sales in August were up 0.1% compared with the consensus estimate of a decline of 0.2%. The metric for July was revised upward to an increase of 1.1% from 1% reported earlier. Year over year, retail sales were up 2.1% in August. 

Core retail sales (excluding auto) were up 0.1% in August, lagging the consensus estimate of 0.2%. The metric for July was for an increase of 0.4%. The so-called control-group sales — which are used to calculate gross domestic product — rose 0.3% in August. The metric excludes food services, auto dealers, building materials stores and gasoline stations.

Industrial Production rose 0.8% in August, beating the consensus estimate of 0.5%. The metric for July was revised downward to a decline of 0.9% from a drop of 0.6% reported earlier. In August, the output of manufacturing increased 0.9% after decreasing 0.7% in July. 

The index for mining climbed 0.8%, while the index for utilities remained same. Capacity utilization increased marginally to 78% in August from 77.9% in July. The metric for July was revised marginally downward to 77.4% from 77.8% reported earlier.

Business Inventories increased 0.4% in July, surpassing the consensus estimate of 0.3%. The metric for June was also 0.3%.