The Nasdaq and S&P 500 were both down more than 1% in the final hour of trading on Tuesday.
After a brief period of optimism, risk markets resumed their decline, with investors turning cautious ahead of the U.S. Federal Reserve’s policy decision set to be announced on Wednesday.
Bitcoin (BTC) was trading at $81,300 at press time, marking a 3.5% decline over the past 24 hours. Other major cryptocurrencies, including Solana (SOL), Ethereum (ETH), and XRP, were also experiencing slightly larger losses.
With a little over an hour left in the trading session, the Nasdaq was down 1.7%, while the S&P 500 had dropped 1.1%.
The Federal Open Market Committee (FOMC) began its two-day meeting today, with its decision and Chairman Jerome Powell’s subsequent press conference scheduled for Wednesday afternoon U.S. time.
Although the Fed is widely expected to keep interest rates unchanged, traders are closely watching for any signs of a shift toward a more accommodative stance, especially in light of recent market fluctuations and a deceleration in inflation.
Tuesday’s market downturn suggests lingering concerns that the Fed may not be ready to loosen monetary policy just yet. February’s inflation slowdown, while notable, was modest, and a single data point may not be enough to warrant a shift in strategy. Furthermore, the recent pullback in equities, though notable, follows years of significant gains.
According to the CME FedWatch tool, traders currently see no likelihood of a rate cut in Wednesday’s meeting and only a 20% probability of an easing move in May. However, expectations for a rate cut in June stand at 66%.
