US open: Stocks mixed as Fed kicks off March policy meeting

Wall Street trading began on a mixed note on Tuesday after the Dow Jones and S&P 500 both closed at new record highs in the previous session.

As of 1530 GMT, the Dow Jones Industrial Average was 0.34% lower at 32,841.00, while the S&P 500 was 0.21% firmer at 3,977.08 and the Nasdaq Composite started out the session 1.15% higher at 13,614.49.

The Dow opened 112.46 points lower on Tuesday, cutting into gains recorded on Monday after the yield on the US 10-year Treasury note slid off recent highs and the Internal Revenue Service began processing $1,400 direct payments to Americans.

The Federal Reserve will kick off its two-day policy meeting on Tuesday, with market participants patiently awaiting comments on inflation and interest rates from chairman Jerome Powell tomorrow.

Also in focus, the benchmark 10-year Treasury yield, which sparked a rotation out of growth stocks as a result of its recent highs, was sitting at roughly 1.60% at the open, down from last week's peaks but still elevated.

On the macro front, Americans tightened their belts in February as extreme weather conditions weighed on retails sales. Retail sales dropped 3% las month, according to the Commerce Department, more than had been expected on the Street, partly due to wild weather conditions across much of the US, with Americans spending less on automotive, furniture, electronics, home improvement, healthcare and clothing purchases, while sales at food and beverage stores were unchanged and sales at gas stations were up 3.6%.

Elsewhere, US industrial production fell unexpectedly in February, with marked declines in manufacturing and mining output easily offsetting a sharp increase in utilities output. According to the Federal Reserve, industrial production slumped 2.2% last month after increasing an upwardly revised 1.1% in January, surprising economists, who had anticipated a 0.6% gain for February.

Still on data, monthly business inventories rose moderately in January thanks to a sharp rebound in consumer spending at the beginning of 2021, with it now taking US businesses less time to offload their products than it has in almost nine years. Business inventories increased 0.3% in January after rising 0.8% in December, according to the Commerce Department, but were still down 1.8% on a year-on-year basis.

Lastly, March's NAHB housing market index fell two points in March to a reading of 82 as homebuilders were forced to deal with rising interest rates and heightened costs for materials - most notably, lumber.

On the earnings front, Lennar and CrowdStrike will both report earnings throughout the course of the day.