2023-03-28 16:08:07 ET
Stocks finished mildly lower on Tuesday in uncertain trading, as investors turned their attention away from the banking sector, which seems to have stabilized after its recent turmoil, and to the fork in the road the Federal Reserve faces on interest rates.
The Nasdaq Composite ( COMP.IND ) closed -0.5% , the S&P 500 ( SP500 ) finished -0.2% , and the Dow Jones Industrial Average ( DJI ) ended -0.1% .
"The leading stock market indices edged lower on Tuesday as higher interest rates and geopolitics took a toll on equities," Andrew Hecht told Seeking Alpha. "Russia's intention to place nuclear weapons in Belarus is a reminder of the world's dangerous situation. Food and energy were in the spotlight, with crude oil rising above $73 per barrel."
The market has been struggling to decide on a likely path for the Fed. Coming out of the recent string of bank closures, an expectation swept Wall Street that the central bank would halt its rate hikes at its next meeting, scheduled for early May. However, this has moderated somewhat recently, with another quarter-point rate increase seeming to become more likely.
As of the close on Wall Street, the market was pricing in a 62% chance that the Fed would leave rates alone at its May meeting, with a 38% likelihood that it would raise by 25 basis points. As of the end of last week, the odds of no change sat near 83%.
Trading in bond market was marked by modest selling and higher yields. The 10-year Treasury yield ( US10Y ) gained 2 basis points to 3.55% and the 2-year yield ( US2Y ) rose 8 basis points to 4.04%.
Among active stocks, McCormick ( MKC ) rallied 10% after the spice maker revealed better-than-expected earnings and revenue .
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S&P 500, Dow, Nasdaq edge lower as Wall Street weighs Fed options