US stocks fell slightly on Tuesday, with the S&P 500 and Nasdaq Composite slipping off their respective highs as investors waited for the key Federal Reserve policy meeting.
The S&P 500 lost 0.2% after rising 0.1% to hit a new all-time high of 4.57.18. The Dow Jones Industrial Average was 150 points lower. The Nasdaq Composite, which hit a record closing high in the previous session, retreated 0.6% as Apple, Alphabet and Amazon all traded in the red.
There were very few outstanding actors on Tuesday. Some reopening games like Boeing, Airlines and Cruise Ships all traded higher. Real estate and materials were the biggest stragglers, while the energy sector supported the broader group somewhat with a plus of 1.5%.
On the data front, the final demand index for producer prices rose 6.6% in the twelve-month months ending in May, the largest increase since the twelve-month data was first calculated in November 2010.
On a monthly basis, the producer price index for final demand rose 0.8%, ahead of the Dow Jones estimate of 0.6%. The producer prices measure the prices paid to the producers as opposed to the prices at the consumer level.
Meanwhile, retail sales data fell 1.3% in May, compared to an expected drop of 0.7% per economist polled by Dow Jones.
"The mixed data didn't raise any eyebrows in the market," said Fiona Cincotta, senior financial markets analyst at City Index. “The market has barely reacted, and few who are brave enough to take large positions ahead of tomorrow's Fed announcement. The big question is whether the Fed will be very slow to start taper talk and the containment debate about ultra -to introduce free monetary policy. "
The Fed's two-day monetary policy meeting began Tuesday and is a focus for markets this week. The central bank is unlikely to take any action. However, comments on interest rates, inflation, and the economy could drive market moves.
Traders will listen carefully to comments on inflation and the Fed's possible tightening plans.
"The longer you wait to speak, let alone start tapering, the greater the imbalances," said George Goncalves, head of US macro strategy at MUFG. "Downside risks as well as recent high inflation data and issues around the RRP / IOER rate will likely make this the last Fed meeting that can be cautious."
Billionaire hedge fund manager Paul Tudor Jones told CNBC on Monday that this Fed meeting could be the most important in Chairman Jerome Powell's career. Tudor Jones also warned that Powell could trigger a big sell-off in risk assets if he doesn't do a good job of signaling a decrease in the Fed's monthly security purchases.
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