By Yasin Ebrahim
Investing.com -- The S&P 500 weaved between gains and losses Tuesday as worries that the Federal Reserve could deliver a larger than expected rate hike pressured stocks to give up their early-day gains.
The S&P 500 fell 0.4%, the Dow Jones Industrial Average slipped 0.6%, or 168 points, and the Nasdaq was up 0.3%.
The Federal Reserve kicked off its two-day meeting on Tuesday. But ahead of the central bank’s rate decision on Wednesday, there has been a late flurry of bets on Fed delivering a 0.75% rate hike rather than the 0.5% expected.
About 94% of the traders expect the Fed to deliver 0.75% hike on Wednesday, a sharp increase from the 6.9% seen in the prior week, according to Investing.com’s Fed Rate Monitor Tool.
Technology stocks attempted to pare some of its losses from a day earlier, but dip-buying action was limited by rising Treasury yields ahead of the Fed decision. The United States 10-Year yield briefly topped 3.45%, a fresh 11-year high.
Big tech, excluding Meta Platforms (NASDAQ:META) and Amazon (NASDAQ:AMZN), traded modestly higher, with Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) up less than 1%.
Oracle (NYSE:ORCL) helped boost sentiment on tech stocks after reporting quarterly results that topped estimates, while guidance touted stronger demand for enterprise software spending.
The full-year guidance “suggests continued strength this coming year—with total cloud revenue expected to grow >30% organically and cloud license and support expected to see growth accelerating and 'could see' double-digit organic growth,” Credit Suisse said in a note.
Twitter Inc (NYSE:TWTR) also bucked the trend lower as reports that Elon Musk will attend an employees' all-hands meeting later this week boosted hopes that the billionaire will follow through on his $44 billion deal to take the social media giant private.
Energy, which was the biggest decliner a day earlier, rose nearly more than 1%
Defensive sectors of the market including consumer staples and utilities, which often serve as bond proxies, were the biggest decliners on the day under pressure from rising Treasury yields.
Clorox Co (NYSE:CLX), Procter & Gamble (NYSE:PG), American Water Works (NYSE:AWK) and Pinnacle West Capital Corp (NYSE:PNW) were among the biggest decliners, down more than 3% and 5% respectively.
Crypto-related stocks show little sign of staging a comeback after Coinbase (NASDAQ:COIN) saying it would slash 18% of its workforce flagged worries of a recession and crypto winter amid a rout in cryptocurrencies including bitcoin.
In other news, FedEx Corporation (NYSE:FDX) jumped more than 14% after raising its dividend by more than 50%.