<figure id="attachment_3182652" aria-describedby="caption-attachment-3182652" style="width: 1600px" class="wp-caption alignnone"><img loading="lazy" class="size-full wp-image-3182652" src="https://media.freemalaysiatoday.com/wp-content/uploads/2025/10/cc0d3c19-jpmorgan-chase.jpg" alt="" width="1600" height="1000" /><figcaption id="caption-attachment-3182652" class="wp-caption-text">The S&amp;P 500 bank index weakened after JP Morgan Chase said it expects expenses to climb in 2026. (Reuters pic)</figcaption></figure>
NEW YORK: The S&amp;P 500 ended Tuesday&#8217;s session slightly lower as investors anticipated that the Federal Reserve would take a hawkish tone even if it cuts interest rates this week, while JP Morgan curbed gains after the biggest US bank warned of hefty expenses for 2026.
The Fed kicked off its two-day policy meeting on Tuesday with traders widely expecting a quarter-percentage point rate cut despite inflation still running above the central bank&#8217;s 2% target.
Policymakers have sent mixed signals about the outlook with some warning that price pressures could easily reaccelerate, while others have been more concerned about the labor market&#8217;s health.
And Tuesday&#8217;s Labor Department report did little to clear the air as job openings increased marginally in October, but hiring remained subdued. Separately, a National Federation of Independent Business (NFIB) report showed companies intending to create new jobs in the near future.
&#8220;It appears that the bias for the market right now is that you&#8217;re going to see a modestly less dovish Fed because of the job openings,&#8221; said Jeff Schulze, head of economic and market strategy at ClearBridge.
Traders are still pricing in a roughly 87% chance of a 25-basis-point rate on Wednesday, according to CME&#8217;s FedWatch Tool. But Schulze sees &#8220;a higher likelihood of a pause after tomorrow&#8217;s rate cut&#8221;.
Adding to nerves ahead of the Fed&#8217;s update &#8212; due after its meeting ends on Wednesday &#8212; Justin Bergner, portfolio manager at Gabelli Funds said that a rally in US Treasury yields was weighing on stocks.
&#8220;It&#8217;s not surprising the equity rally would stall ahead of the Fed and with bond yields continuing to rally,&#8221; said Bergner. The US 10-year Treasury yield was last up on the day at 4.18%, on track for its fourth straight day of gains.
According to preliminary data, the S&amp;P 500 lost 6.19 points, or 0.09%, to end at 6,840.32 points, while the Nasdaq Composite gained 30.58 points, or 0.13%, to 23,577.24. The Dow Jones Industrial Average fell 174.82 points, or 0.37%, to 47,564.50.
After rising nearly 1% earlier in the day, the S&amp;P 500 bank index weakened after JP Morgan Chase&#8217;s consumer and community banking chief Marianne Lake said the bank expects expenses to climb to about US$105 billion in 2026, driven largely by growth and volume-related costs.
Among the 11 S&amp;P 500 industry sectors energy led gains during the session, while healthcare was the biggest loser.
Trading in technology shares was also choppy on Tuesday. US President Donald Trump said he would allow Nvidia to ship H200 processors, its second-most powerful AI chips, to China for a 25% fee on those exports. But, a Financial Times report that said Beijing was set to limit access to those chips, while China hardliners in Washington slammed the Trump administration for its decision.
Investor appetite for corporate spending on artificial intelligence infrastructure is likely to face greater scrutiny with results due from Oracle and Broadcom later this week.
Traders also kept an eye on a bidding war between Paramount Skydance and Netflix over Warner Bros.
Among others, Campbell&#8217;s shares fell after the packaged-food maker said it selectively raised prices to counter higher costs, while AutoZone fell after its quarterly results missed estimates.

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