Wall Street ends lower on tariff worry as Fed decision eyed

NEW YORK: US stocks fell on Tuesday (Mar 18) to snap a two-session streak of gains, as investors exercised caution ahead of a monetary policy decision from the Federal Reserve while gauging the potential impact of President Donald Trump's tariff policies.

The Fed will release its latest policy statement on Wednesday, where the central bank is widely expected to keep interest rates unchanged, along with its updated summary of economic projections (SEP).

Markets are currently pricing in about 60 basis points (bps) of cuts from the Fed this year, although several US central bank officials have cautioned against the Fed moving too quickly on rates and said they would wait to see the impact of tariffs in economic data before making any policy shifts.

"There's just great uncertainty here about the tariffs, how extensive they are going to be, how that's going to economically impact us, how much the Fed might ease eventually and the economy in general," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

"There is a lot of confusion out there, and when there's confusion, when there isn't a real opportunity for stocks to go up and for companies to expand and make more money, there's fear."

According to preliminary data, the S&P lost 60.39 points, or 1.06 per cent, to end at 5,614.73 points, while the Nasdaq Composite lost 301.91 points, or 1.70 per cent, to 17,506.75. The Dow Jones Industrial Average fell 255.49 points, or 0.61 per cent, to 41,586.14.

Adding to inflation concerns, US import prices unexpectedly rose in February amid higher costs for consumer goods.

Stocks had recently shown some signs of stabilising after several weeks of declines that sent the S&P 500 and Nasdaq down more than 10 per cent from their recent highs, also known as correction territory.

The blue-chip Dow is slightly more than 2 per cent away from reaching correction levels.

Growth stocks were among the hardest hit, with the S&P 500 growth index down more than 2 per cent at one point during the session. Communication services were the worst-performing of the 11 major S&P sectors.
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