Investing.com – Wall Street traded lower on Tuesday as market participants considered positions at the beginning of the Federal Reserve’s (Fed) two-day meeting on monetary policy and oil slumped 2% on the back of OPEC’s monthly report.
At 12:44PM ET (16:44GMT), the Dow Jones fell 59 points, or 0.28%, the S&P 500 lost 12 points, or 0.49%, while the Nasdaq Composite traded down 30 points, or 0.51%.
The Fed is widely expected to raise the fed funds target range by 25 basis points to a range between 0.75% and 1.00% when it announces its decision on Wednesday, with markets having already priced in the odds at around 91%, according to Investing.com's Fed Rate Monitor Tool.
In that light, the focus will center on the updated economic projections, particularly the dot plot that shows members’ expectations for future changes to interest rates, along with the context of Fed chair Janet Yellen’s remarks in the follow-up press conference.
Market players wish to gauge whether the Fed might now be considering a faster pace of future policy tightening, with the spotlight on whether there could be a total of four hikes in 2017, compared to their prior projection of just three back in December.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, firmed ahead of the monetary policy decision, advancing on Tuesday by 0.12% to 101.38 by 12:46PM ET (16:46GMT).
Earlier Tuesday on the data front, producer price inflation rose more than expected in February, pointing to steadily rising inflation pressures that would support the Fed’s expected removal of accommodative policy.
Meanwhile, the major move in markets was in oil markets as prices collapsed after OPEC’s monthly report revealed that Saudi Arabia had increased production in February.
U.S. crude futures sank 2.23% to $47.32 by 12:47PM ET (16:47GMT), while Brent oil slumped 1.77% to $50.44.