US close: Dow registers heavy losses ahead of FOMC decision

dl nyse new york stock exchange new york city nyc wall street wall st nasdaq markets trading finance unsplash — Sharecast / David Vives via Unsplash

Wall Street stocks registered heavy losses on Tuesday as market participants awaited the outcome of the Federal Reserve's two-day policy meeting and digested more mega-cap earnings.

At the close, the Dow Jones Industrial Average was down 1.49% at 37,815.92, while the S&P 500 lost 1.57% to 5,035.69 and the Nasdaq Composite saw out the session 2.04% weaker at 15,657.82.

The Dow closed 570.17 points lower on Tuesday, easily wiping out yesterday's gains and wrapping up the blue chip's worst month since September 2022.

Central bank policymakers will meet for their two-day policy meeting on Tuesday, with their latest interest rate decision set to be revealed on Wednesday, with the Fed broadly anticipated to keep interest rates steady. However, investors have grown worried that chairman Jerome Powell's post-meeting comments may be more hawkish than originally thought as a result of a run of hotter-than-expected inflation reports.

Corporate earnings were again in focus on Tuesday, with fast food giant McDonald's delivering mixed first-quarter results on Tuesday as restructuring costs weighed on profits, Coca-Cola lifting annual sales forecasts after first-quarter numbers at the US giant topped expectations, Restaurant Brands topping estimates following a revival in demand at its Burger King sites, and Eli Lilly hiking its full-year forecasts by $2.0bn on the back of a strong performance from its weight-loss drug.

After the close, Amazon said profits had more than tripled in the first quarter of its current trading year, principally driven by its cloud computing unit, but still delivered quarterly revenues that fell short of estimates on the Street..

On the macro front for Tuesday, S&P Case-Shiller's February housing price index showed that home prices jumped 6.4% year-on-year in February, another increase after the prior month's annual gain of 6% and the fastest rate of price growth since November 2022. The ten-city composite rose 8%, up from a 7.4% increase in January, while the 20-city composite posted an annual gain of 7.3%, up from a 6.6% advance reading in January.

Elsewhere, the Conference Board's consumer confidence index retreated to 97.0 in April from a downwardly revised 103.1 reading for March, the present situation index declined from 146.8 to 142.9, while the expectations index fell from a slightly upwardly revised reading of 74.0 last month to 66.4 in April.

Finally, the cost of employing workers picked up modestly at the start of 2024 amid a jump in benefits, according to the Department of Labor, which said the country's employment cost index had advanced by 1.2% quarter-on-quarter, following a 0.9% rise over the prior three months and compared to a 1.0% increase forecast by economists. Wage and salary growth was steady at 1.1% in the quarter, despite gains in both the private and public sectors, while benefits sped up from 0.7% to 1.1%.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

3M Co. (MMM) $96.51 4.72%
Procter & Gamble Co. (PG) $163.20 0.95%
Dowdupont Inc. (DWDP) $0.00 0.00%
McDonald's Corp. (MCD) $273.04 -0.19%
Travelers Company Inc. (TRV) $212.16 -0.35%
Coca-Cola Co. (KO) $61.77 -0.44%
Merck & Co. Inc. (MRK) $129.22 -0.69%
International Business Machines Corporation (CDI) (IBM) $166.20 -0.73%
Home Depot Inc. (HD) $334.22 -0.77%
JP Morgan Chase & Co. (JPM) $191.74 -0.80%