U.S. stock indexes declined broadly on Tuesday as investors grew cautious one day before the Federal Reserve's interest-rate decision. The Dow Jones Industrial Average fell 0.96% to 51,916 points, the S&P 500 dropped 0.47% to 7,584 points, and the Nasdaq 100 edged down 0.42% to 29,006 points.
The tech-heavy Nasdaq 100 had been the worst performer earlier in the week amid a debate over artificial-intelligence safety that weighed heavily on semiconductor stocks. Those titles showed signs of recovery on Tuesday.
At the Fed's third policy meeting under new chair Kevin Warsh, markets widely expect a 0.25-percentage-point rate increase on Wednesday, which would place the funds rate at 3.75% to 4.00%. Uncertainty remains high because Warsh has offered few clear signals to markets.
Inflation, largely driven by higher energy prices, shows no sign of easing given the recent escalation in the Middle East. As a result, the yield on 10-year U.S. Treasuries climbed above the psychologically significant 5% mark, extending a rise that began Monday.
Within the Nasdaq 100, chipmakers led gains. Qualcomm, Arm Holdings, AMD and Marvell Technology advanced between 2.8% and 3.4%, while Nvidia rose 0.8%. Demand also lifted computer-and-storage maker Dell and IT company HP Enterprise.
In steel, Steel Dynamics gained 2.1% after the Chinese steel industry association called on major producers to tighten output limits and reduce inventories. The request, reported by Bloomberg from the association's WeChat post, said China's steel sector was entering a phase of "reduction and optimization" after years of growth. Traders viewed the move as a potential relief from downward price pressure on global steel markets.
Cryptocurrency-related stocks faced headwinds as optimism faded that comprehensive U.S. crypto regulation could advance this week. Bitcoin fell 2.8%, while Coinbase shares dropped 7.5% and Strategy lost 5.4%.
