Stocks dip deeper into bear market ahead of big Fed news

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The S&P 500 fell 0.4% to 3,735.48 as investors braced for the Fed's announcement about how sharply it will raise interest rates.

The S&P 500 fell 14.15, or 0.4%, to 3,735.48 as investors braced for the Federal Reserve's announcement on Wednesday about how sharply it will raise interest rates. It wobbled between losses and gains through the day after a couple big companies flexed financial strength with stronger profits and payouts to shareholders.

"No one’s going to take meaningful positions today ahead of what could be a rip-roaring day” with the Fed's announcement, said Katie Nixon, chief investment officer for Northern Trust Wealth Management. But economists said the data won’t keep the Federal Reserve from raising its key interest rate on Wednesday by a larger-than-usual amount. Investors are now mostly expecting the biggest increase since 1994, a hike of three-quarters of a percentage point, or triple the usual amount.

Treasury yields continued to climb, with the two-year yield touching its highest level since November 2007, before the financial crisis, according to Tradeweb. The 10-year yield during the day reached its highest level since April 2011. On Wall Street, Oracle soared 10.4% after it reported stronger revenue and earnings for its latest quarter than analysts expected. FedEx jumped 14.4% after it boosted its dividend payout by more than 50%.

"The real calm in today’s market is driven very significantly by the focus on this week’s Fed decision.” said Greg Bassuk, CEO of AXS Investments."Today’s is either the calm before the storm or the calm that will hopefully represent an extended period of calm.”

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