LIVE MARKETS-Stocks mixed as traders show caution ahead of Fed rate decision

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STOCKS MIXED AS TRADERS SHOW CAUTION AHEAD OF FED RATE DECISION

Stocks were mixed early on Tuesday ahead of an expected Federal Reserve rate cut on Wednesday, with investors cautious that Fed Chair Jerome Powell will adopt a hawkish tone to future monetary policy.

The interest rate decision comes as Fed policymakers are increasingly divided on whether to continue easing. Some officials stress that inflation, which continues to run above the Fed’s 2% target, could increase further, while others point to risks from a softening labor market.

Fed funds futures traders are pricing in 88% odds of a cut on Wednesday, with the next reduction not fully priced in until June.

The Dow Jones Industrial Average .DJI and S&P 500 .SPX both edged higher on Tuesday, while the Nasdaq Composite .IXIC slipped. Energy .SPNY was the best performing subsector, while communications services .SPLRCL was the laggard.

Here is Tuesday’s early market snapshot:

(Karen Brettell)

EARLIER ON LIVE MARKETS:

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