March 16 (UPI) — The Dow Jones Industrial Average dropped a seven-day winning streak Tuesday as markets anticipated a policy announcement from the Federal Reserve.
The blue-chip index fell 127.51 points, or 0.39%, dropping from a record high set on Monday, while the S&P 500 dropped 0.16%, also ending a streak of consecutive gains and falling from its record highs. The Nasdaq Composite ended the day flat with a gain of 0.088%.
Investors on Tuesday looked ahead to guidance from the Fed on Wednesday as the central bank began its two-day meeting.
Markets came off of their session highs as the benchmark 10-year treasury yield rose above 1.62% briefly during afternoon trading.
Goldman Sachs predicted the Fed will raise its 2021 economic growth forecast to 6.2% from 4.2% last December, while raising its estimate of core annual inflation to 1.9% for this year.
“Fed officials are unlikely to see much of a problem [with rising rates] at a time when financial conditions remain easy, activity is picking up and powerful growth impulses are set to support the economy all year,” Goldman Sachs said.
Kathy Bostjancic, chief U.S. financial economist for Oxford Economics, told USA Today that Fed Chairman Jerome Powell has “a fine line to walk” as he will likely try to ease the markets’ concerns by noting that inflation and employment remain below the central bank’s goals.
Markets on Tuesday also reacted as retail sales for February fell 3%, a greater decline than was anticipated, although January’s retail sales were also revised upward to an increase of 7.6% from 5.3%.
Tech stocks also helped to soften losses as Google’s parent company, Alphabet, gained 1.43%, Apple grew 1.27% and Amazon climbed 0.33%.
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