MARKET SNAPSHOT

Major stock indexes were little changed and Treasury yields rose ahead of the much expected start of interest rate cuts by the Federal Reserve tomorrow. Oil futures gained amid renewed Middle East tensions. Gold prices slipped as the dollar strengthened.

MARKET WRAPS

EQUITIES

Stock indexes wobbled on the first day of the Federal Reserve's pivotal policy meeting, while traders kept lifting the chances of a supersize interest-rate cut.

Derivatives markets suggest the probability of a half-percentage-point cut is about two-in-three, according to CME Group's FedWatch tool.

Stocks were little changed after paring early gains. The Dow industrials and S&P 500 moved less than 0.1% on the day. The Nasdaq Composite edged up 0.2%.

"The key risk will be convincing market participants that they are not behind the curve, but rather balancing risks appropriately," said Josh Hirt, U.S. senior economist at Vanguard Group.

Earlier Tuesday, the Nikkei Stock Average lost 1.0%, mainly weighed down by technology stocks. Risks surrounding AI have become more two-sided over the summer, so it's perhaps unsurprising for investors to take risks off the table as the FOMC meeting looms, said Michael Brown, senior research strategist at Pepperstone.

Hong Kong's Hang Seng Index closed 1.4% higher, reversing opening losses.

Australia's S&P/ASX 200 rose 0.2%, with widespread gains carrying it to a second straight record close.

New Zealand's NZX-50 shed 0.3% with aged-care stocks and medical-device maker Fisher & Paykel contributing to a second straight decline.

Markets in mainland China were closed in observance of the Mid-Autumn Festival.

COMMODITIES

Oil futures rose after news reports said pagers carried by thousands of Hezbollah operatives in Lebanon exploded around the same time, raising fears of a broader Middle East conflict that could threaten crude flows from the region.

West Texas Intermediate crude for October delivery rose 1.6% to $71.19 a barrel on the New York Mercantile Exchange. November Brent crude was up 1.3% at $73.70 a barrel on ICE Futures Europe.

Crude appeared to take a cue from headlines surrounding the incident, adding to gains in morning trade, said Phil Flynn, commodity analyst at Price Futures Group in Chicago.

The incident may serve to "put war risk premium back into the market that was taken out," Flynn said.

Front month Comex gold for September delivery lost 0.6% to settle at $2564.30 per troy ounce.

TODAY'S TOP HEADLINES

Fed Prepares to Lower Rates, With Size of First Cut in Doubt

The Federal Reserve is set to cut borrowing costs at its two-day meeting that ends Wednesday. The goal: preserve a solid job market now that price pressures have cooled.

The decision over whether to cut the Fed's benchmark interest rate, currently at a two-decade high between 5.25% and 5.5%, by either a larger half percentage point or by a traditional quarter point will come down to how Chair Jerome Powell leads his colleagues through a finely balanced set of considerations.

Retail sales rise again and show U.S. economy still on solid ground ahead of Fed rate cut

The numbers: Sales at retailers rose slightly in August in a sign of resilience among U.S. households, suggesting the economy is still on solid footing as the Federal Reserve plots to cut interest rates.

Sales inched up 0.1% last month, the government said Tuesday.

The increase was better than expected. Economists polled by the Wall Street Journal had forecast a 0.2% decline on the expectation that car sales last month would be a big drag. But they weren't.

Canada Inflation Eases Back to Central Bank Target in August

OTTAWA-Canadian inflation matched the central bank's target last month for the first time in more than three years, all but cementing the case for further interest rate cuts.

The consumer-price index, a measure of goods-and-services prices across the economy, rose 2.0% in August from a year earlier, Statistics Canada said Tuesday. That was just below economists' expectations and marked a sharp slowdown from 2.5% in July.

With inflation at target, for now at least, and unemployment more than a percentage point above a year ago and the economy spluttering, the path for Bank of Canada policy appears clear. Where economists disagree is over whether the latest data further tilts the odds toward the central bank easing borrowing costs even more sharply at one of this year's two remaining policy meetings.

JPMorgan in Talks With Apple to Take Over Credit Card From Goldman

JPMorgan Chase is talking with Apple about taking over the tech company's credit-card program.

Discussions started earlier this year and have advanced in recent weeks, but a deal could still be months away, according to people familiar with the matter. It isn't guaranteed a deal will come together, given key details, including the price, are still to be negotiated.

Apple and Goldman Sachs, the current issuer of the card, decided to part ways last year on their partnership, which includes credit cards and savings accounts.

U.S. Steelmakers Warn of Lower Profits as Manufacturers Slow Factories

U.S. steelmakers projected lower quarterly profits, as automotive companies and equipment manufacturers dial down production.

Charlotte, N.C.-based Nucor said Tuesday that lower demand for steel in a weakening manufacturing sector and falling sales of its steel construction materials would result in a roughly 80% decline in third-quarter profit, including one-time charges, from the same quarter last year. Indiana-based Steel Dynamics late Monday forecast lower quarterly profit as well, describing earnings from its steel business as being "meaningfully lower" from the prior quarter because of weak demand and lower steel prices.

Steelmakers have been struggling this year against a slump in U.S. manufacturing that is cutting into demand for the flat-rolled sheet steel that makes up the bulk of steel companies' output.