Stocks Drift Lower Ahead of Fed Decision

After an early pop that carried the S&P 500 and Nasdaq Composite to fresh record highs, the market lost steam and drifted slightly lower for the remainder of the session. The S&P 500 touched a new peak at 6,626.99 before slipping to a 0.1% decline, while the Nasdaq set its own record at 22,397.50 before finishing just beneath the flatline. The Dow Jones Industrial Average lagged with a 0.3% loss.

The subdued tone reflected investors’ caution heading into tomorrow’s FOMC decision. With a quarter-point rate cut already fully priced in, attention is squarely on the updated economic projections and Chair Powell’s press conference, which will shape expectations for additional cuts in October and December.

The Fed will convene with its full roster after Stephen Miran was confirmed by the Senate and Lisa Cook secured a court ruling allowing her to remain in place. Neither development is expected to affect the outcome of this week’s meeting. Meanwhile, a strong August Retail Sales report (+0.6% vs. +0.3% expected) did little to shift market sentiment, as rate cut odds held steady.

Sector action was mixed. Energy stocks led the advance with a 1.7% gain, supported by crude oil rising 2.0% to $64.56 per barrel. Consumer discretionary (+0.8%) also outperformed thanks to strength in Tesla (+2.8%) and Amazon (+1.1%), while staples (+0.2%) and communication services (+0.3%) posted modest gains. Losses were generally contained, aside from a 1.8% drop in the utilities sector.

Breadth reflected the lack of conviction, with decliners modestly outpacing advancers on both the NYSE and Nasdaq.

On the corporate front, Hims & Hers Health slid after receiving an FDA warning over its semaglutide claims, while Warner Bros. Discovery gave back some of its recent run following a downgrade from TD Cowen. Oracle gained 1.5% after reports confirmed its cloud partnership with TikTok would remain intact under the proposed ownership transition plan, with final negotiations expected later this week.

Overall, the market’s sideways drift underscored a “wait and see” posture, with investors content to hold positions ahead of what could be a pivotal Fed meeting.

Our FTinvest 11 model portfolio delivered a strong performance today, rising 0.78% to close at a new record high of 862.77. After spending much of the previous sessions consolidating near peak levels, today’s action underscored renewed momentum and investor confidence in the index’s leading components.

The early part of the session was marked by a steady upward push that held throughout the day, with the index benefiting from strength in several of its heavyweight names. Unlike in recent sessions, where gains have often been tested by late pullbacks, FTinvest 11 maintained its edge into the close, underscoring broad participation and follow-through buying interest.

This fresh record adds another milestone to what has been a sustained rally, with the index continuing to outperform many of its peers and showing resilience despite broader market uncertainty. The ability to press higher and close at session highs highlights investor conviction as FTinvest 11 keeps building on its upward trajectory.