U.S. stocks experienced a decline on Tuesday, with both the Dow and S&P 500 marking their third consecutive slide as investors awaited economic data in a shortened holiday week to assess the Federal Reserve's policy direction.
Despite Tesla's 2.92% gain after CEO Elon Musk unveiled a one-month trial of its Full Self-Driving technology, overall market momentum was sluggish.
All eyes are on the upcoming release of the Personal Consumption Expenditures Price Index (PCE) on Friday, which is expected to reveal a 0.4% rise in February and a 2.5% annual increase.
Core inflation, which excludes food and energy, is estimated to have advanced 0.3% last month, maintaining the annual pace at 2.8%.
Stephen Massocca, senior vice president at Wedbush Securities, commented, "The big number is Friday. That's the number everyone's going to pay attention to...
I don't anticipate a whole lot happening until we get that data point." On the economic front, U.S. orders for long-lasting manufactured goods exceeded expectations in February, and there are signs of recovery in business spending on equipment.
The Conference Board's consumer confidence index remained stable at 104.7 in March.
The Dow fell 31.31 points to 39,282.33, the S&P 500 lost 14.61 points to 5,203.58, and the Nasdaq Composite slid 68.77 points to 16,315.70.
Markets hit record highs last week after the Fed maintained its projection for three interest-rate cuts this year. Expectations for a rate cut in June have increased to a 70.4% chance, up from 59.2% last week, according to the CME's FedWatch Tool.
Trump Media & Technology group rose 16.1% to $57.99 after completing a reverse merger. McCormick was the best performer on the S&P 500, jumping 10.52% after beating market expectations for first-quarter sales and profit. Seagate Technology climbed 7.38% after an upgrade by Morgan Stanley.
However, United Parcel Service shares tumbled 8.16% after announcing its 2026 forecast. Declining issues outnumbered advancers on the NYSE and Nasdaq.
The S&P 500 had 33 new 52-week highs and one new low, while the Nasdaq recorded 122 new highs and 124 new lows. Trading volumes are expected to remain light throughout the week, particularly as the holiday approaches.