Market Turbulence: Fed Meeting Looms Amid Tariff Concerns

Wall Street indices dipped as traders worried over U.S. tariff impacts and awaited the Federal Reserve's rate decision. The market pause followed prior gains across major indexes. Tech stocks, including Alphabet and Nvidia, saw declines. Gold hit record highs, reflecting a shift to safe assets.

The major Wall Street indices took a downturn on Tuesday due to prevailing concerns about the economic ramifications of U.S. tariff policies, as investors anxiously anticipated a key monetary policy decision from the Federal Reserve. The central bank's rate-setting meeting commenced on the same day, with expectations indicating that interest rates will remain unchanged as per LSEG data. Some Federal Reserve officials have voiced caution, suggesting waiting for further data to assess the impact of tariffs before making any policy decisions.

Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management, remarked, "I don't think they (Fed) know exactly how this (trade policy) is going to play out." The market took a breather after substantial gains of over 2% in the previous sessions, following a major selloff last week that resulted in significant discounts on U.S. stocks. The S&P 500 had already declined more than 10% since its February peak, officially entering correction territory. Meanwhile, the Dow Jones is nearing correction levels, and the Nasdaq confirmed its correction status on March 6.

The trading session also witnessed U.S. President Trump and Russian President Vladimir Putin discussing the Ukraine war resolution efforts. Amid these geopolitical and economic tensions, communication services led the decline in the S&P 500, significantly impacting industry giants like Alphabet and Nvidia. Conversely, investors pivoted towards safe-haven assets, with gold prices reaching unprecedented heights. Simultaneously, manufacturing production figures exceeded expectations for February, providing a silver lining in otherwise turbulent market conditions.

(With inputs from agencies.)