U.S. stocks overcame a late-session retreat that wiped out the day's gains to close higher as investors waited to see if the Federal Reserve would raise interest rates.
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All major equity indexes were up from the session opening, but about an hour before closing surrendered those gains after Senate Majority Leader Mitch McConnell, R-Kent., said Democrats had rejected a short-term spending bill. Then, shortly before the closing bell, all three major indexes turned positive.
The Fed’s two-day meeting concludes Wednesday with an announcement about whether the central bank will raise a key interest rate, something that has been expected – and feared by investors -- but which may not happen in the face of a massive equity decline.
President Trump also tweeted Tuesday, urging the Fed to “feel the market” as it mulls an interest rate hike.
Investors will also be watching the language that the Fed uses as it describes its decision, hoping that the bank projects a more dovish posture toward interest rates.
|I:DJI||DOW JONES AVERAGES||24404.48||-301.87||-1.22%|
|I:COMP||NASDAQ COMPOSITE INDEX||7020.3562||-136.87||-1.91%|
Crude oil prices extended their plunge. The price of West Texas Intermediate, the benchmark U.S. crude oil, plunged, at one point down more than 7 percent to about $47 in afternoon trading.
U.S. stocks closed sharply lower Monday, deepening annual losses, amid continued worries about the impact a trade war with China may have on the U.S. economy. At the lows of the afternoon the Dow Jones Industrial Average had fallen more than 600 points.
Amid the volatility, the Dow, the S&P 500 and the Nasdaq Composite were all sitting in negative territory for 2018 -- the first down year since 2015. The Russell 2000, a basket of smaller U.S. based companies, closed in bear market territory.
The Nasdaq Composite erased its 2018 gains in Monday's sell-off, leaving only the Nasdaq 100 among the closely followed stock averages that remain positive for 2018.
China’s Shanghai Composite closed the session down 0.8 percent.
Hong Kong’s Hang Seng Index finished the day down 1.1 percent.
Japan’s Nikkei ended the day down 1.8 percent.
In European trading, London’s FTSE traded off 0.4 percent, Germany’s DAX gained 0.4 percent and France’s CAC lost 0.1 percent.