The Federal Reserve began its two-day meeting on Tuesday to set its monetary policy, and it is expected to keep its benchmark interest rate unchanged in the current range of 5.25%-5.50%, where it has been since last July.

U.S. stocks fell on Wall Street this Tuesday, as data indicating higher wage pressures for companies heightened inflation concerns while the Federal Reserve held its first meeting.

In this context, the Dow Jones Industrial Average finished at 37,815.92 points, losing 1.5%, the S&P 500 settled at 5,035.69 points, down 1.6%, and the Nasdaq Composite depreciated by 2%, reaching 15,657.82 points.

U.S. labor costs rose more than expected in the first quarter, driven by increases in wages and benefits, sparking new inflation concerns, which cooled investors’ expectations for Fed rate cuts.

The employment cost index increased by 1.2% from January to March after a 0.9% rise in the fourth quarter of 2023, while the year-over-year increase was 4.2%.

The Federal Reserve began its two-day meeting on Tuesday to set its monetary policy and is expected to maintain its benchmark interest rate unchanged in the current range of 5.25%-5.50%, where it has been since last July.

According to Goldman Sachs, “the FOMC is likely to maintain its message that higher inflation has delayed cuts at its May meeting.”

Investors have largely discounted the possibility of rate cuts this summer, and September is now considered the favorite month for the U.S. central bank to begin a cutting cycle.