The US markets ended lower on Tuesday as traders seemed jittery ahead of the Federal Reserve's monetary policy decision on Wednesday. The Fed is widely expected to raise interest rates by another 75 basis points, although some see an outside chance for a 100 basis point rate hike. Further, treasury yields saw upside ahead of the Fed announcement, with the yield on the benchmark ten-year note jumping to a new eleven-year high. Several of other major central banks around the world are also scheduled to announce their latest monetary policy decisions this week, including the Bank of England and the Bank of Japan. Besides, a notable drop by shares of Ford (F) also weighed on Wall Street, with the auto giant plunging by 12.3 percent to its lowest closing level in almost two months. The pullback by Ford comes after the company warned inflation-related supplier costs during the third quarter will run about $1.0 billion higher than originally expected.
On the economic data front, the Commerce Department released a report showing an unexpected spike in new residential construction in the US in the month of August, although the report also showed a steeper than expected slump in building permits. The report showed housing starts soared by 12.2 percent to an annual rate of 1.575 million in August after plunging by 10.9 percent to a revised rate of 1.404 million in July. The sharp increase surprised participants, who had expected housing starts to edge down by 0.1 percent to an annual rate of 1.445 million from 1.446 million originally reported for the previous month. On the sectoral front, Gold stocks turned in some of the market's worst performances on the day, dragging the NYSE Arca Gold Bugs Index down by 3.0 percent.
Dow Jones Industrial Average fell 313.45 points or 1.01 percent to 30,706.23, Nasdaq dropped 109.97 points or 0.95 percent to 11,425.05 and S&P 500 was down by 43.96 points 1.13 percent to 3,855.93.
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