S&P 500 and Nasdaq Edge Higher Amid Fed Meeting

Stock Market Updates and Key Indices Movement

The S&P 500 and Nasdaq Composite both achieved record highs during Tuesday's session, underscoring positive investor sentiment despite mixed economic signals. The S&P 500 edged up 0.1%, while the Nasdaq gained 0.2%. Meanwhile, the Dow Jones Industrial Average dipped slightly by 0.1%, reflecting a divergence in performance across indices.

The latest retail sales report painted a picture of consumer resilience amid economic headwinds. Retail sales in August climbed 0.6% month-over-month, surpassing the expected 0.2% growth. Excluding cars and gasoline, sales rose an even stronger 0.7%, signaling robust spending in categories like clothing and e-commerce. Analysts attributed the uptick to a strong back-to-school shopping season, which bolstered nonstore retailers. This data suggests that consumer spending, a critical driver of U.S. economic growth, remains firm even as inflationary pressures persist.

Federal Reserve Developments and Rate Cut Expectations

The confirmation of Stephen Miran as a Federal Reserve governor comes at a pivotal moment, as the central bank convenes for a two-day policy meeting. Miran, narrowly approved in a Senate vote of 48-47, is expected to play a significant role in shaping monetary policy decisions. His confirmation has reignited concerns over Fed independence, given his prior role as a White House advisor.

Markets are currently pricing in a 96% probability of a 25 basis-point rate cut, with a smaller chance of a more aggressive reduction. The anticipated rate cut is largely attributed to signs of labor market softening, as unemployment data reveals increasing strain. Analysts believe that a rate adjustment would help offset economic uncertainties stemming from trade tensions and inflationary pressures.

Company Highlights and Economic Indicators

Tesla shares rose 2% on Tuesday, continuing their recovery after CEO Elon Musk purchased shares in the company, marking his first such acquisition since 2020. The move has renewed investor confidence in the electric vehicle giant, which had faced challenges earlier in the year.

The retail sector also showed strength, particularly in e-commerce and apparel, as consumers ramped up spending ahead of the school year. Categories like clothing stores and nonstore retailers saw significant growth, reflecting a strong back-to-school season. Economists note that this spending pattern highlights consumer adaptability despite economic uncertainty.

Key economic indicators released Tuesday further emphasized resilience in the U.S. economy. Industrial production and capacity utilization data showed modest improvements, while business inventories grew steadily. These metrics, combined with robust retail sales, suggest that the economy is navigating challenges with relative stability.