Stocks dip ahead of key Fed meeting

U.S. stocks fell slightly on Tuesday ahead of the Federal Reserve’s latest monetary policy meeting.

The S&P 500 dipped 0.1% after rising 0.1% to reach a new all-time high of 4,57.18. The Dow Jones Industrial Average traded 50 points lower. The Nasdaq Composite, which hit a record closing high in the previous session, pulled back 0.3%.

There were very few standout performers on Tuesday. Some reopening plays, such as Boeing, airlines and cruise lines, traded higher.

On the data front, the final demand index for producer prices advanced 6.6% for the 12 months ended in May, the largest increase since 12-month data were first calculated in November 2010.

On a monthly basis, the producer price index for final demand rose 0.8%, ahead of the Dow Jones estimate of 0.6%. Producer prices measure the prices paid to producers as opposed to prices on the consumer level.

Meanwhile, May’s retail sales data fell 1.3%, compared to an expectation of a 0.7% decline per economists polled by Dow Jones.

“The mixed data hasn’t raised any eyebrows in the market,” said Fiona Cincotta, senior financial markets analyst at City Index. “The market has barely responded with few brave enough to take big positions ahead of tomorrow’s Fed announcement. The big question is whether the Fed will start, very slowly, introducing taper talk and the debate surrounding reining in ultra-lose monetary policy.”

The Fed’s two-day policy meeting started on Tuesday, and it’s a focal point for the markets this week. The central bank is not expected to take any action. However, commentary on interest rates, inflation and the economy could drive market moves.

Traders will listen closely for comments on inflation and the Fed’s eventual tapering plans.

Billionaire hedge fund manager Paul Tudor Jones told CNBC on Monday that this Fed meeting could be the most important in Chairman Jerome Powell’s career. Tudor Jones also warned that Powell could spark a big sell-off in risk assets if he doesn’t do a good job of signaling a taper in the Fed’s monthly asset buying.