Stocks Slip Ahead Of Fed Meeting, Chipmakers Suffer From China's Threat, Bitcoin Spikes Above $107,000: What's Driving Markets Tuesday?

The stock market edged lower by midday Tuesday as investors treaded cautiously ahead of the Federal Reserve’s policy decision scheduled for Wednesday.

Although a rate cut appeared widely priced in—with Fed Funds futures assigning a 96% probability—investors are fully focused on the Fed's forward guidance and Chair Jerome Powell‘s remarks, particularly in light of recent robust economic data.

November's retail sales data showed an unexpected rebound, rising 0.7% month-over-month, surpassing expectations of 0.5%. On an annual basis, sales climbed 3.8%, the fastest pace since December 2023, driven by strong auto sales growth.

Semiconductor stocks led the downturn amid renewed geopolitical tensions following reports that China is broadening antitrust scrutiny on U.S. chipmakers’ acquisitions in recent years. Last week, Beijing launched an investigation into Nvidia Corp.'s NVDA 2019 acquisition of Mellanox Technologies.

The iShares Semiconductor ETF SOXX declined 1.5%, weighed down by sharp losses in major chip stocks. Broadcom Inc. AVGO dropped over 5%, while Marvell Technology Inc. MRVL plunged over 8%.

By midday, the major U.S. indices were in negative territory. The S&P 500 slipped 0.4%, the Dow Jones Industrial Average fell 0.6%, and the Nasdaq 100 declined 0.4%.

Both the U.S. dollar and Treasury yields remained steady, reflecting cautious positioning by institutional investors.

In commodities, gold dipped 0.3%, while natural gas and oil prices fell 2% and 1%, respectively, signaling continued weakness in the energy sector.

Cryptocurrencies continued to outperform. Bitcoin BTC/USD climbed 1.3% to surpass $107,000, reaching a market capitalization of $2.13 trillion. The total cryptocurrency market value rose to $3.68 trillion, a new record high.

Tuesday’s Performance In Major US Indices, ETFs

Major Indices	Price	1-day Chg %
S&P 500	6,050.50	-0.4%
Nasdaq 100	22,000.37	-0.4%
Dow Jones	43,443.08	-0.6%
Russell 2000	2,345.01	-0.7%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY fell 0.4% to $604.65.
• The SPDR Dow Jones Industrial Average DIA eased 0.6% to $435.75.
• The tech-heavy Invesco QQQ Trust Series QQQ fell 0.4% to $536.21.
• The iShares Russell 2000 ETF IWM dipped 1% to $232.10.
• The Consumer Discretionary Select Sector SPDR Fund XLY outperformed, up by 0.2%; the Energy Select Sector SPDR Fund XLE lagged for the second straight session, down 1.3%.

Tuesday’s Stock Movers

• Amer Sports Inc. AS rallied 5.7% after UBS analysts raised the stock price target from $27 to $37.
• Amentum Holdings Inc. AMTM tumbled by over 11% in reaction to its earnings reports, with the company highlighting pessimistic guidance for 2025.

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