As the Federal Reserve's two-day interest-rate-setting meeting concludes, the central bank is widely expected to keep interest rates unchanged. However, analysts believe that the Fed may slow or pause bond holdings under quantitative tightening.
Boeing CFO Brian West is expected to speak at BofA conference. Investors will watch out for comments on 737 and 787 production, supply chain stability, tariffs, defense fixed- price programs and divestments.
General Mills is expected to report a decline in third-quarter revenue, hurt by fallen demand for its snacks and cereals. Investors will look for comments on consumer spending and the retail landscape, pricing strategies and forecast updates.
Williams-Sonoma is expected to post a rise in fourth-quarter revenue, helped by demand for its high-end home decor products. Investors will look out for annual forecast as well as comments on furniture demand and tariffs.
From Latin America, Brazil's central bank will announce the country's Selic interest rate following the monetary policy meeting. The interest rate will likely be hiked by 100 bps to 14.25%. Separately, Argentina will report its fourth-quarter and 2024 GDP numbers along with its trade balance figures for February. The country's economy in the October to November period likely grew 1.70%, after recording six straight contractions in the previous quarters. The government's statistics office is expected to post a trade surplus of $662 million for the month of February.
Stocks fell to snap a two-session streak of gains, as investors exercised caution ahead of a monetary policy decision from the Federal Reserve, while gauging the potential impact of President Donald Trump's tariff policies. "There's just great uncertainty here about the tariffs, how extensive they are going to be, how that's going to economically impact us, how much the Fed might ease eventually and the economy in general," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "There is a lot of confusion out there, and when there's confusion, when there isn't a real opportunity for stocks to go up and for companies to expand and make more money, there's fear." Alphabet shares ended 2.20% lower. Nvidia fell 3.43%. The S&P 500 lost 1.07% to end at 5,614.66 points, while the Nasdaq Composite dropped 1.71% to 17,504.12. The Dow Jones Industrial Average fell 0.62% to 41,581.31.
Treasury yields fell as traders bet that Federal Reserve Chair Jerome Powell will adopt a relatively dovish tone when he speaks at the conclusion of the U.S. central bank's two day meeting on Wednesday. Strong demand for an auction of 20-year bonds helped send yields to session lows while falling stocks also reignited safe haven demand for U.S. government debt. The Treasury Department sold $13 billion in 20-year bonds at a high yield of 4.632%. Bid-to-cover ratio was 2.78. Meanwhile, benchmark 10-year notes rose 6/32 to yield 4.2850%. Two-year notes gained 1/32, yielding 4.0397% 30-year bonds were up 7/32, yielding 4.5862%.
The dollar eased against the euro as Germany's parliament approved plans for a massive spending surge and as the Federal Reserve kicked off its March policy meeting that could offer clues to the path of U.S. interest rates. The euro also found support earlier in the session after data showed German investor morale improved more than expected in March. The euro was 0.25% higher at $1.0948, after hitting $1.0954 earlier in the session, its highest since October 10. Meanwhile, the greenback rose against the Japanese yen to trade 0.07% higher at 149.32 yen, ahead of Wednesday's policy decision by the Bank of Japan. The dollar index fell 0.13% to 103.23.
Oil prices eased as U.S. President Donald Trump and Russian President Vladimir Putin discussed moves to end the three-year-old war in Ukraine, which could result in a possible easing of sanctions on Russian fuel exports. Putin agreed to Trump's proposal that Russia and Ukraine cease attacking each other's energy infrastructure for 30 days. Brent futures fell 0.77% to $70.52 a barrel, while U.S. West Texas Intermediate crude futures lost 1.07% to $66.86 per barrel. Even if the U.S. and Russia work out a ceasefire in Ukraine, some analysts said it will likely take a long while before Russian energy exports increase in a significant way.
Gold prices rose over 1% to hit a fresh record high, anchored above the $3,000/oz mark, as rising Middle East tensions and trade uncertainties due to U.S. President Donald Trump's tariff plans fueled demand for the safe- haven asset. Spot gold hit a peak of $3,038.26 per ounce and was last up 1.11% at $3,034.75 an ounce. U.S. gold futures rose 1.22% higher at $3,042.90 per ounce. Bullion, which had a stellar run last year, has maintained its momentum this year as well, gaining over 15% year-to-date and hitting record highs 14 times. "The escalation in the Middle East tensions – as Israel launched military strikes on Hamas targets in Gaza, which threatens to undermine the ceasefire – has injected a new bid into gold," said Nicky Shiels, head of metals strategy at MKS PAMP SA.
