Stock Market Today: Stocks Sell Off Ahead of Fed Decision
Stocks sold off sharply Tuesday as anxiety set in ahead of Wednesday's policy statement from the Federal Reserve.


Stocks opened in negative territory Tuesday, with losses accelerating into the close. Investors were already skittish ahead of tomorrow's Fed decision and this morning's disappointing inflation data did little to calm nerves.
Ahead of the opening bell, the Bureau of Labor Statistics said the Employment Cost Index (ECI), which measures the cost of labor to businesses and governments, was up 1.2% quarter-to-quarter in Q1 – higher than the 0.9% increase in Q4 and the 1% gain economists were expecting. Year-over-year, the ECI rose 4.2%.
The data hit just as the Federal Reserve kicked off its latest meeting. A steady stream of economic data this year has shown that inflation remains sticky, pushing back the Fed's timeline for cutting interest rates.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The central bank is widely expected to keep the federal funds rate at its current 23-year high when it concludes its meeting tomorrow, but investors are hopeful for any clues on when the first rate cut could hit.
"The Fed is expected to say that recent signs of persistent inflation mean the central bank needs to keep interest rates high for longer," says Bill Adams, chief economist for Comerica Bank. "Barring a major crisis, a rate cut looks off the table before September, and even that is less likely than it seemed a few weeks ago given recent data demonstrating a broad-based increase in prices of services, houses, and labor costs in early 2024."
According to CME Group's FedWatch Tool, futures traders are currently pricing in the greatest odds (42%) for a rate cut at the Fed's November meeting, with a 41% chance it won't happen until December.
3M rises despite dividend cut
It wasn't all about the Fed today, though. Investors sifted through a jam-packed earnings calendar, paying particular attention to several blue chip companies that reported.
3M (MMM), for one, was the best Dow Jones stock Tuesday, adding 4.7% after the Post-It maker disclosed higher-than-expected first-quarter earnings and raised its full-year guidance. This offset news that 3M will cut its dividend following the spinoff of its healthcare business and as the company faces litigation costs related to "forever chemical" lawsuits.
MMM is now at risk of being booted from the Dividend Aristocrats, the best dividend stocks in the S&P 500 that have raised their annual payouts for at least 25 straight years. 3M's streak of dividend hikes will end at 64 years.
Fellow Dow stock Coca-Cola (KO) also beat analysts' estimates for its first-quarter results, but shares fell 0.5%. And McDonald's (MCD) slipped 0.2% after posting its first earnings miss in years.
Eli Lilly sizzles as demand for weight-loss drugs spikes
Outside of the 30-stock index, Eli Lilly (LLY) stock jumped 6.0% after the pharmaceutical giant reported earnings. For Q1, LLY disclosed higher-than-expected earnings and lifted its full-year forecast thanks to sizzling demand for its weight-loss drugs, Mounjaro and Zepbound.
Mounjaro, which is also used to treat type 2 diabetes, saw revenue spike to $1.8 billion from $568.5 million in Q1 2023. Revenue for Zepbound, which was just approved by the Food and Drug Administration (FDA) in November, came in at $517.4 million.
As for the indexes, the Dow Jones Industrial Average fell 1.5% to 37,815, the S&P 500 shed 1.6% to 5,035, and the Nasdaq Composite ended the day down 2.0% to 15,657. All three indexes finished the historically strong month of April with significant losses.
Related content
- Kiplinger's Economic Calendar for This Week
- Biden Calls for Doubling Capital Gains Tax
- Super Micro Computer: Why This Hot Stock Could Hit $1,500
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Denmark Raised the Social Security Age to 70. Should the US Do the Same?
Social Security is facing a shortfall. One idea is to raise the retirement age, as Denmark did recently, but would it work in America?
-
Californians to Save Thousands on Property Tax with New 2025 SALT Deduction
Tax Breaks The federal state and local sales tax (SALT) deduction cap is higher this year, and could translate into bigger savings for Golden State homeowners.
-
5 Ways Portfolios Have Been Impacted In Trump's First Six Months in Office
President Trump's first six months in office have kept investors on their toes thanks to whipsaw tariff policies and a massive tax cut and spending bill.
-
We Check on Our Favorite Bond Funds Amid Tariff Volatility
Bond volatility has ramped up amid debt and inflation worries. Most of our top bond ETFs are outperforming, while one laggard presents a unique opportunity.
-
Are You a Doormat at Work? The Hidden Cost of Excessive People-Pleasing
I talked to the author of the upcoming book 'Fawning,' and she explains how the 'fawn' response can lead to blurred boundaries, difficulty asserting needs and a loss of self, with serious emotional consequences like anxiety and PTSD.
-
A Guide to Personalizing Your Retirement Plan for Maximum Impact
This strategy challenges conventional retirement rules of thumb by combining traditional savings, home equity and annuities to provide higher income and liquid savings and help cover long-term care costs.
-
How Advisers Can Rev Up Sales With Medicare
Help boost your revenue stream by integrating Medicare solutions into your financial practice for long-term client value and profits.
-
Stock Market Today: S&P 500 Hits High After Verizon Earnings
The Nasdaq also notched a new high on Monday, while the Dow finished with a marginal loss.
-
What Will the Fed Do at Its Next Meeting?
Rate cuts remain on hold this summer, experts say.
-
Take It From a Tax Attorney: This Is a Magic Multimillion-Dollar Tax-Saving Strategy
The qualified small business 1202 stock exemption is a $10 million exclusion that seems too good to be true and is often overlooked.