Stock market today: U.S. stocks fall as Wall Street waits for the Fed

The New York Stock Exchange. (Michael Nagle/Bloomberg)

NEW YORK — U.S. stocks are drifting lower Tuesday as Wall Street waits to hear from the Federal Reserve, which will make its latest announcement on interest rates Wednesday.

The S&P 500 was 0.5% lower in early trading, coming off a dizzying ride where it tumbled 10% from its record and then rallied for two straight days. The Dow Jones Industrial Average was down 107 points, or 0.3%., as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.1% lower.

• S&P 500 market updates here

The recent mini-recovery for stocks coincided with a quieter White House when it comes to tariffs. President Donald Trump has been holding off on big announcements since threatening huge taxes on European Champagnes and wine coming into the country last week. A worldwide set of tariffs, tailored to reciprocate other countries’ on the United States, is set to take effect on April 2.

For weeks, Trump’s earlier, rat -a- tat announcements on tariffs and other policies created so much uncertainty that economists worried U.S. households and businesses will hold back on spending, which would hurt the economy.

It all makes the calculus different for the Fed from its last meeting, just two months ago, as it decides what to do with interest rates. The Fed could lower its main interest rate, which would make it easier for U.S. businesses and households to borrow, which in turn could boost the economy. But lower interest rates can also push up inflation, and U.S. consumers have already been bracing for higher inflation because of tariffs.

Virtually everyone on Wall Street expects the Fed to hold its main interest rate steady on Wednesday. More attention will be on the forecasts it will publish after the meeting, showing where officials expect interest rates, inflation and the economy to head in upcoming years.

For now, traders on Wall Street are largely expecting the Fed to deliver two or three cuts to rates through the end of this year.

On Wall Street, Tesla helped drag the market lower after falling 5.6%. After initially rocketing higher following Trump’s election, the electric-vehicle maker’s stock has been struggling on worries that its brand has become too intertwined with Elon Musk, who has been leading efforts to cut spending by the U.S. government. Tesla vehicles and dealerships have become targets of people unhappy with Trump and his policies.

Rivals, meanwhile, continue to chip away at its sales. China’s BYD announced on Monday an ultra fast EV charging system that it says is nearly as quick as a gas fill-up.

Alphabet slipped 0.6% after the owner of Google said it would buy cybersecurity firm Wiz for $32 billion. It would be the company’s most expensive purchase in its 25-year history, and it could boost the tech giant’s in-house cloud computing amid burgeoning artificial intelligence growth.

• Real-time TSX market updates here

In stock markets abroad, indexes rose across much of Europe and Asia.

Japan’s Nikkei 225 rose 1.2%. Investors expect the Bank of Japan to keep its benchmark interest rate unchanged at a monetary policy board meeting due to wrap up Wednesday.

Trading on Indonesia stock exchange was suspended temporarily as the benchmark JSX tumbled as much as 6%. But it bounced back a bit, falling 3.8%.

Investors have been selling shares in state-owned banks after the government launched a sovereign wealth fund, called Danantara, that so far has not proven popular. Worries over tariff increases and other risks have also shaken confidence in the economy, said Budi Frensidy, a professor at the University of Indonesia.

In the bond market, the yield on the 10-year Treasury edged down to 4.30% from 4.31% late Monday.

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Stan Choe, The Associated Press

AP writers Matt Ott, Yuri Kageyama and Niniek Karmini contributed to this report.