US stocks slump as investors brace for the Fed’s next interest rate decision

• US stocks dipped Tuesday as investors braced for the Fed’s next interest rate move.
• Investors are pricing in a near-100% chance rates will be kept level on Wednesday.
• All three benchmark indexes ended the day lower, with the Dow losing over 100 points.

Stocks slumped Tuesday ahead of the Federal Reserve’s next interest rate move. All three benchmark indexes ended the day in the red, with the Dow losing over 100 points as central bankers deliberated over their next policy decision.

Markets are pricing in a 99% chance central bankers will choose to keep interest rates level on Wednesday. But some traders are still expecting one more interest rate hike before the end of the year, with markets pricing in a 40% chance that rates will end 2023 higher than their current level. Fed Chair Jerome Powell has previously warned that rates could stay higher for longer than markets are anticipating.