Stock market today: Indexes slip as the last Fed meeting of the year kicks off

• Stocks fell Tuesday as investors prepped for the start of the Fed's last policy meeting of the year.
• Expectations are high for a quarter-point rate cut at the conclusion of the meeting on Wednesday.
• November retail sales came in strong on Tuesday, pushing rate-cut odds slightly lower.

US stocks dropped on Tuesday as investors braced for the Federal Reserve's last policy decision of the year.

The Fed's two-day meeting starts Tuesday, with markets strongly convinced it will deliver 2024's final interest rate cut on Wednesday. The CME FedWatch Tool shows the odds of a 25 basis point cut stand at 95.4%.

That's down slightly from near-100% odds priced in on Tuesday. The market adjusted its view after parsing through newly-released retail sales data. November sales were better than expected, led higher by vehicle purchases and broad-based consumer strength.

"The consumer is alive and well. When the labor market is strong and households are not extended, people spend," wrote Scott Helfstein, Global X head of investment strategy. There were gains in almost every category from electronics & appliances to health & personal care. Companies needed strong topline sales to meet expectations and this is a good sign."

Underlying consumer strength signals that the economy remains robust, which may reduce pressure on the Fed to hurry with further rate cuts in the coming months. In fact, economic strength and shifting inflation trends have muddied dovish outlooks for 2025 among some economists.

The odds that the Fed pauses rate cuts at its January meeting have crept up steadily, sitting at almost 80% on Tuesday, up from about 70% a week ago.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Tuesday:

• S&P 500: 6,052.60, down 0.35%
• Dow Jones Industrial Average: 43,472.92, down 0.56% (-244.56 points)
• Nasdaq composite: 20,109.68, down 0.33%

Here's what else is happening today:

• The stock market is verging on a Santa rally, but only if the Fed delivers on expectations, says Bank of America.
• Some states are already working to create their own strategic bitcoin reserves.
• Why the chip stock rally could broaden beyond AI in 2025, according to Bank of America.
• Here is a complete rundown of Wall Street's 2025 S&P 500 targets.
• A bitcoin crash could be the stock market's top threat next year, Interactive Brokers chairman says.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil dropped 1.26% to $69.80 a barrel. Brent crude, the international benchmark, was fell 1.15% to $73.06 a barrel.
• Gold was slid by 0.76% to $2,650.2 an ounce.
• The 10-year Treasury yield was flat at 4.403%.
• Bitcoin rose 1.27% to $107,513.