U.S. stocks end flat ahead of Fed rate-cut decision

Stock indices ended today's trading session mostly unchanged as investors await the Federal Reserve’s upcoming decision on interest rates. Despite the market's flat performance, several key economic data reports were released.

Key economic data reports were published

The Census Bureau published its retail sales report, showing a 2.13% year-over-year increase in consumer spending at retailers and a 0.1% month-over-month rise. This was a surprise as economists had predicted a 0.2% decline. Core retail sales, which exclude automobile purchases, also rose 0.1% month-over-month, slightly missing the forecast of 0.2%.

In addition, the Federal Reserve released its U.S. Industrial Production Report, which tracks the inflation-adjusted output of manufacturers, utilities, and mines. For August, industrial production climbed 0.8% month-over-month, outperforming the expected 0.2% increase and significantly rebounding from July’s -0.9%.

The National Association of Home Builders (NAHB) revealed its U.S. Housing Market Index for September. The index, based on a survey of roughly 900 builders, dropped to 41, signaling that the majority of home builders maintain a pessimistic outlook, as a reading below 50 indicates a negative sentiment.

U.S. stock markets ended nearly flat

U.S. stocks finished nearly flat on Tuesday as investors awaited the Federal Reserve’s interest rate decision set for Wednesday.

The Dow and S&P 500 ended the day largely unchanged, while the Nasdaq posted a modest gain of 0.2%.

Earlier in the session, the S&P 500 briefly reached a record high after a surprise increase in August retail sales helped ease concerns about a potential sharp economic slowdown.

Despite this, markets were still pricing in over a 60% chance that the Fed would cut interest rates by 50 basis points at the conclusion of its two-day meeting on Wednesday, according to the CME’s FedWatch Tool. This marked a shift from the previous week when most traders expected a smaller 25-basis-point cut.

Notable stock movers included Intel, which rose 2.7% after securing Amazon's cloud-services division as a customer for its custom AI chips. Amazon shares also increased by 1%. In the AI space, semiconductor leader Nvidia saw its shares slip by 1%. Meanwhile, Microsoft shares climbed following the tech giant's announcement of a new $60 billion share buyback program, along with a 10% increase in its quarterly dividend.

Apple (AAPL) shares fell 2.8% after several Wall Street analysts expressed concerns about weaker demand for the upcoming iPhone 16. This decline also impacted semiconductor stocks in Apple's supply chain, including Broadcom (AVGO), Skyworks Solutions (SWKS), Qorvo (QRVO), and Cirrus Logic (CRUS).

Intel (INTC) stood out as the top performer, rising 6.4% during regular trading and an additional 8% in after-hours trading. These gains were driven by Intel’s new deal with the U.S. government and its strategic move to spin off its foundry business.

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