On Tuesday, the U.S. equity markets experienced a sharp decline, aligning with global markets’ monthly losses, as investors awaited crucial economic data and the Federal Reserve’s two-day policy meeting.
The Dow Jones Industrial Average dropped by 570.17 points, or 1.49%, closing at 37,815.92. The S&P 500 saw a loss of 80.49 points, or 1.57%, ending at 5,035.68, while the Nasdaq Composite fell by 325.26 points, or 2.04%, to reach 15,657.82.
Gold prices declined, the dollar strengthened, and benchmark U.S. Treasury yields increased after the U.S. Labor Department announced higher-than-anticipated first-quarter employment cost growth. This development is unlikely to change the Federal Reserve’s tightening stance.
“The sell-off was triggered by the higher-than-expected employment cost index,” said Jay Hatfield, portfolio manager at InfraCap in New York. “And investors are positioning ahead of what is likely to be a hawkish press conference following the Fed meeting.”
The Federal Reserve Open Market Committee gathers on Tuesday for its monetary policy meeting, which is expected to culminate on Wednesday with a decision to leave the Fed funds target rate in the 5.25% to 5.50% range.
The accompanying statement, as well as Fed Chair Jerome Powell’s subsequent press conference, will be parsed for clues regarding the central bank’s expected path forward with respect to interest rate cuts.
(With Reuters Input)
