Major stock markets mostly fell Tuesday as attention turned to the US Federal Reserve’s upcoming policy decision, with traders hoping for guidance on its interest rate plans as President-elect Donald Trump prepares to take office.

Wall Street’s major indices slid, with the Nasdaq Composite coming off a record high despite solid US retail sales data.

“Investors are cashing in some of their profits ahead of Wednesday’s Fed rate decision at which a 25-basis-point rate cut is baked in,” said IG analyst Axel Rudolph.

The Fed is widely expected to lower borrowing costs on Wednesday for the third meeting in a row as it looks to guide the world’s largest economy to a soft landing.

But investors have already started paring their bets on how many times the Fed will cut over the next 12 months owing to still-sticky inflation, a strong labor market and uncertainty about Trump, who has pledged to slash taxes and impose tariffs on US imports.

The reduction in the number of Fed interest rate cuts investors expect is evident in the rise in US Treasury yields, as they demand higher returns in expectation of fewer cuts.

“US yields continue to rise as investors worry about the Fed pausing or slowing its monetary loosening cycle in 2025,” said Rudolph.

The Fed statement and comments by its policymakers will be pored over for clues about next year’s outlook.

Tariffs fallout

The Canadian dollar fell to its lowest level against the US dollar since April 2020 after Canada’s Deputy Prime Minister Chrystia Freeland quit Monday in a surprise move, saying she disagreed with PM Justin Trudeau over Trump’s tariff threats.

The resignation of Freeland, who also stepped down as finance minister, marked the first open dissent against Trudeau from within his cabinet, and may threaten his hold on power.

Investors are also keeping tabs on Beijing after Chinese leaders’ latest measures to kickstart the economy fell short of expectations, with weak retail sales data Monday reinforcing the need for more support.

In European equities trading, London slid as official data showing a jump in UK wage growth cemented forecasts that the Bank of England will avoid cutting interest rates this week.

Paris edged higher but Frankfurt dipped as sentiment was hit by news that German business confidence this month hit the lowest level since the start of the coronavirus pandemic.

“The Ifo Business Climate Index published today speaks for itself: the German economy is in the midst of a crisis,” said CMC Markets analyst Konstantin Oldenburger.

Bitcoin traded close to a record high of almost $107,791 reached Monday on continued optimism that Trump will introduce measures to deregulate the cryptocurrency market.

Among individual companies, Pfizer jumped 4.8 percent as it projected slightly higher profits in 2025 compared with this year.

Key figures around 2150 GMT

New York – Dow: DOWN 0.6 percent at 43,449.90 (close)

New York – S&P 500: DOWN 0.4 percent at 6,050.61 (close)

New York – Nasdaq Composite: DOWN 0.3 percent at 20,109.06 (close)

London – FTSE 100: DOWN 0.8 percent at 8,195.20 (close)

Paris – CAC 40: UP 0.1 percent at 7,365.70 (close)

Frankfurt – DAX: DOWN 0.3 percent at 20,246.37 (close)

Tokyo – Nikkei 225: DOWN 0.2 percent at 39,364.68 (close)

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 19,700.48 (close)

Shanghai – Composite: DOWN 0.7 percent at 3,361.49 (close)

Euro/dollar: DOWN at $1.0498 from $1.0512 Monday

Pound/dollar: UP at $1.2707 from $1.2683

Dollar/yen: DOWN at 153.41 yen from 154.15 yen

Euro/pound: DOWN at 82.52 pence from 82.88 pence

West Texas Intermediate: DOWN 0.9 percent at $70.08 per barrel

Brent North Sea Crude: DOWN 1.0 percent at $73.19 per barrel

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