US close: Stocks mixed as investors turn to Fed decision

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Wall Street saw mixed results on Tuesday as investors awaited the Federal Reserve's decision on interest rates, due on Wednesday.

The Dow Jones Industrial Average dipped slightly by 0.04% to close at 41,606.18.

In contrast, the S&P 500 managed a modest gain of 0.03%, finishing at 5,634.58, while the Nasdaq Composite rose by 0.2% to 17,628.06.

Market attention is focused on the Fed, with a 25-basis-point rate cut already priced in ahead of the policy meeting set to conclude on Wednesday.

However, uncertainty remains about whether the central bank will opt for a larger, 50-basis-point reduction in response to weakening economic conditions.

“Equity indices continue their bullish run ... [with] the S&P 500 within a whisker of an all-time high,” said Axel Rudolph at IG earlier.

“Unexpectedly rising US August retail sales not only boosted stocks but also triggered a rebound in US Treasury yields from their one-to-two year lows.”

Retail sales rise more slowly in August

In economic news, US retail sales edged up by 0.1% in August, reaching $710.8bn, indicating cautious consumer spending.

While the increase was lower than July’s revised 1.1% gain, it surpassed economists' expectations of a 0.2% decline.

"On its own, [the retail sales data] supports a smaller 25 bps cut rather than 50bps, but it will more likely be the state of the US labour market and the Fed’s perception of the risk of a deterioration that will drive that decision tomorrow," said Ryan Brandham, head of global capital markets, North America, at Validus Risk Management.

Industrial production, on the other hand, showed stronger-than-expected growth, climbing 0.8% in August following a 0.6% drop in July.

The housing market also saw improvement, with the NAHB/Wells Fargo Housing Market Index rising to 41, beating the forecast of 40.

Tech stocks buoyant with Intel in focus

On the corporate front, Intel surged 2.68% after announcing the demerger of its foundry business and an expanded partnership with Amazon's cloud division.

The company also secured $3bn in federal grants to produce chips for the Pentagon.

Microsoft shares rose by 0.88% as it unveiled a $60bn stock buyback plan and raised its dividend by 11%.

Other tech stocks, such as Dell and Shopify, also performed well, buoyed by positive analyst ratings from Mizuho Securities and Redburn Atlantic, respectively.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Intel Corp. (INTC) $21.47 2.68%
Dow Chemical Co. (DOW) $51.52 1.68%
American Express Co. (AXP) $265.40 1.65%
Caterpillar Inc. (CAT) $353.47 1.65%
Walt Disney Co. (DIS) $92.86 1.10%
Nike Inc. (NKE) $80.63 1.05%
Chevron Corp. (CVX) $143.37 0.93%
Microsoft Corp. (MSFT) $435.15 0.88%
JP Morgan Chase & Co. (JPM) $209.33 0.67%
Boeing Co. (BA) $156.39 0.54%