The S&P 500 ranged between small gains and losses for much of the session after data showed private-sector business activity in the United States contracted for a second straight month in August, with particular softness in the services sector as demand weakened in the face of inflation and tighter financial conditions.
Traders are split between expecting a 50 basis points hike and a 75 bps hike by the central bank after several policymakers recently pushed back against expectations of a dovish pivot and emphasized the Fed’s commitment to fight against inflation. After a rough start to the year, markets rallied since mid-June on hopes inflation has peaked, but that summer rally snapped last week due to renewed fears around an aggressive monetary policy tightening path by the Fed.