New York Stocks Edge Lower as FOMC Meeting Looms... August Retail Sales Strong

Key Rate Decision on the 17th: 0.25 Percentage Point Cut Likely
Focus on Powell’s Press Conference and the Dot Plot
August Retail Sales Up 0.6% from Previous Month, Exceeding Expectations
Besant: "U.S.-China Trade Agreement Imminent"

The three major indices of the New York Stock Exchange in the United States showed slight declines on the 16th (local time). After rising across the board the previous day on news of progress in the U.S.-China trade agreement and expectations of a September rate cut, the market turned cautious as it focused on the regular meeting of the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve, which opened that day.

As of 11:05 a.m. on the New York Stock Exchange, the Dow Jones Industrial Average, which is centered on blue-chip stocks, was down 180.87 points (0.39%) from the previous trading day at 45,702.58. The S&P 500 Index, which focuses on large-cap stocks, was down 11.08 points (0.17%) at 6,604.2, while the tech-heavy Nasdaq Index was down 23.887 points (0.11%) at 22,324.862.

By stock, Oracle rose 2.17% on news of a U.S.-China agreement on the sale of TikTok. The Wall Street Journal reported the previous day that Oracle was a leading candidate to acquire TikTok's U.S. business rights if China's ByteDance decided to sell. Alphabet, the parent company of Google, which surpassed a market capitalization of 3 trillion dollars the previous day, reversed course and fell 0.26%. Tesla continued its rise from the previous day, gaining 1.73% on the back of CEO Elon Musk’s large-scale stock purchase.

Investor attention is focused on the September FOMC meeting, which will be held over two days starting today. Due to recently weak employment indicators, the market is taking it for granted that there will be a rate cut this month. According to CME FedWatch, the federal funds rate futures market is reflecting a 96.1% probability that the Fed will cut the current benchmark rate of 4.25-4.5% by 0.25 percentage points in September. The probability of a larger 0.5 percentage point cut is only 3.9%.

The key points to watch at this meeting are the remarks of Fed Chair Jerome Powell at the press conference and the dot plot, which contains the Fed’s future rate outlook. With a September rate cut seen as a certainty, investors are expected to focus on clues regarding the pace of future cuts.

Notably, this meeting is attended by both Lisa Cook, a director whom President Donald Trump attempted to dismiss, and Stephen Miran, Trump’s economic advisor who also serves as the White House National Economic Council director. One day before the FOMC meeting, the U.S. Court of Appeals for the District of Columbia Circuit in Washington, D.C. ruled that Cook could retain her position as Fed director while litigation is ongoing. The White House announced its intention to appeal the ruling. Attention is also focused on the discussions that may take place among committee members regarding the future path of interest rates.

The retail sales data released today showed that recovery continues despite aggressive tariff policies. According to the U.S. Department of Commerce, retail sales in August 2025 reached 732 billion dollars, up 0.6% from the previous month. This figure far exceeded Bloomberg’s forecast of 0.2%. The July retail sales growth rate was also revised upward from 0.5% to 0.6%. As a result, retail sales, which had declined in April and May due to the impact of tariff policies, have continued to recover since June. Despite concerns about slowing employment, the resilience of consumer spending, which underpins the U.S. economy, has been confirmed.

Ellen Zentner, Managing Director at Morgan Stanley Wealth Management, analyzed, "U.S. consumer sentiment appears strong," adding, "While this is good news for the economy, it could intensify the debate over how aggressively the Fed should cut rates."

Although it did not directly affect the stock market, optimism about U.S.-China trade negotiations persisted. U.S. Treasury Secretary Scott Besant said in an interview with CNBC, "Each round of talks is becoming increasingly productive, and it seems that China also believes a trade agreement is possible," adding, "We will be meeting again soon." He stated that additional negotiations would take place before the U.S.-China "tariff truce" ends in November and indicated that a trade agreement is imminent. Following the TikTok sale agreement the previous day, he also suggested that discussions were underway not only on extending the tariff truce but also on actual tariff reductions.

U.S. Treasury yields remained steady. The 10-year U.S. Treasury yield, the global benchmark for bond yields, stood at 4.03%, while the 2-year yield, which is sensitive to monetary policy, was at 3.51%, both unchanged from the previous day.