Stocks plummet, Dow declines for ninth straight session as Fed decision is due

U.S. stocks fell on Tuesday, with the Dow down for the ninth straight session, as investors remained cautious ahead of the Federal Reserve's final policy statement of the year, following economic data showed consumer spending remained strong.

Retail sales in the United States climbed more than expected in November, boosted in part by an acceleration in vehicle purchases, indicating solid underlying momentum in a resilient economy.

Investors were mostly focused on the Fed's policy statement on Wednesday, virtually totally pricing in a 25-basis-point interest rate drop.

The Federal Reserve's summary of economic predictions (SEP) and comments from Chair Jerome Powell will be closely watched, as they may suggest how aggressively the US central bank may lower interest rates in 2025.

The Fed may postpone its easing in an economy with strong momentum and sticky inflation, as the new Trump administration is expected to implement policies to encourage growth and potentially reignite rising prices.

The Dow Jones Industrial Average (.DJI) fell 267.58 points, or 0.61%, to 43,449.90; the S&P 500 (.SPX) fell 23.47 points, or 0.39%, to 6,050.61; and the Nasdaq Composite (.IXIC) sank 64.83 points, or 0.32%, to 20,109.06.

While the Nasdaq set a new high on Monday and the S&P 500 is up about 27% this year, the Dow has struggled recently, suffering its ninth consecutive daily fall, the longest losing streak since February 1978.

Treasury rates fluctuated between gains and losses throughout the day, as investors braced for a "hawkish cut" from the Fed.

Almost all of the 11 major S&P sectors fell on the day, led by a 0.9% decrease in industrials (.SPLRCI). Consumer discretionary was the only advancer, with Tesla (TSLA.O) up 3.6% after Mizuho raised its price objective by $285 to $515. Wedbush also raised its price objective for the electric vehicle producer to $515 on Monday.

Volume on US exchanges was 16.17 billion shares, compared to the 14.11 billion average for the entire session for the previous 20 trading days.