US stocks eased on Tuesday, slipping back from record levels as the Federal Reserve opened its September policy meeting. The S&P 500 fell 0.1%, the Nasdaq Composite dipped 0.15% and the Dow Jones Industrial Average declined 0.2%, marking a quiet start to what could be a pivotal week for markets.
The pullback came after a strong August retail sales report showed consumer spending rose 0.6% month on month, well above the 0.2% expected. The data suggested households are continuing to spend despite sticky inflation and signs of weakness in the labour market.
Investors also digested the narrow Senate confirmation of Stephen Miran as a new Fed governor, confirmed in a 48-47 vote on Monday evening. Miran joins the board just in time to take part in this week’s policy decision. His dual role, remaining a White House adviser on leave rather than stepping down entirely, has sparked renewed debate about the independence of the central bank, especially with President Trump still pursuing the removal of Governor Lisa Cook.
Corporate headlines offered a mixed picture. Tesla shares rose 2%, extending Monday’s gains after CEO Elon Musk disclosed a personal stock purchase, his first since 2020. Oracle advanced further after reports that it is part of a consortium in line to secure the US-China TikTok deal. The agreement is expected to feature in trade discussions between Trump and Chinese President Xi Jinping on Friday.
Markets are firmly expecting a Fed rate cut, with traders pricing in a 96% probability of a 25-basis-point reduction and a slim chance of a larger move. The decision and Chair Jerome Powell’s comments are due Wednesday.
In London, the FTSE 100 mirrored Wall Street’s softer tone, closing lower as investors weighed US-China trade talks. US Treasury secretary Scott Bessent, leading negotiations in Spain, said he was confident of progress on tariffs and a TikTok deal ahead of Friday’s presidential talks.
The Bank of England will also be in focus later this week. Stronger UK labour market data has reduced the odds of another immediate cut, with Wednesday’s inflation reading likely to sharpen the picture before Thursday’s policy announcement.