U.S. stocks closed mostly flat on Tuesday, reversing earlier gains that had lifted the S&P 500 and the Dow Jones Industrial Average to record highs, as investors awaited the Federal Reserve’s interest rate decision on Wednesday.
The S&P 500 briefly reached 5,670.81 points early in the session, following new economic data that eased fears of a sharp slowdown in the U.S. economy.
The latest report from the U.S. Department of Commerce showed that retail sales unexpectedly increased in August, with a drop in car dealership revenues offset by strong online shopping.
These figures suggest that the economy remained solid for most of the third quarter. Expectations were fairly established before today’s economic data, which generally indicated a growth environment, albeit relatively slow. The afternoon trading reflects how we are moving away from record highs, as someone is likely to be disappointed tomorrow.
SPX
The S&P 500 gained 1.49 points, or 0.03%, to 5,634.58, while the Nasdaq rose 35.93 points, or 0.20%, to 17,628.06. The Dow Jones fell 15.90 points, or 0.04%, to 41,606.18.
According to CME’s FedWatch tool, markets are pricing in a 65% probability that the Federal Reserve will cut interest rates by 50 basis points at the end of its two-day meeting on Wednesday.
Microsoft was the top performer in the S&P 500, with shares rising after the company’s board approved a new $60 billion share buyback program and increased its quarterly dividend by 10%.