US markets today: Wall Street holds near record highs as Fed rate cut looms, Donald Trump lawsuit and earnings moves shake stocks

US stocks hovered near record levels on Tuesday as investors counted down to the Federal Reserve’s policy decision, widely expected to deliver the first rate cut of 2025.The S&P 500 slipped 0.2% after its latest all-time high, while the Dow Jones Industrial Average fell 169 points, or 0.4%. The Nasdaq Composite was down 0.1% by mid-morning trade in New York, AP reported.Stocks have rallied this year on expectations that the Fed will begin a series of rate cuts to shore up a slowing jobs market, which many traders now see as a bigger threat to the economy than inflation pressures stoked by President Donald Trump’s tariffs.The Fed has so far held off on easing policy because inflation remains above its 2% target. Markets are betting on a 25-basis point cut on Wednesday, with Fed Chair Jerome Powell’s press conference and the central bank’s updated forecasts expected to draw heavy scrutiny.Tuesday’s data showed US retail sales rose more than expected in August, though analysts said part of the increase reflected higher prices. While the report suggested household spending remains resilient, it did not shift expectations for imminent rate cuts extending into 2026.Global fund managers are tilting their allocations toward equities at the highest level in seven months, a Bank of America survey showed, even as a record 58% of respondents said stocks look overvalued.Corporate movers added to Wall Street’s mixed tone. Dave & Buster’s tumbled 16.1% after posting weaker quarterly profits, while Ralph Lauren slipped 1.3% after unveiling its “Next Great Chapter: Drive” strategy, forecasting mid-single digit annual revenue growth over three years.The New York Times Co. dropped 2.8% after Trump filed a $15 billion defamation lawsuit against the paper and four journalists, citing coverage ahead of the 2024 election.On the upside, Steel Dynamics jumped 5.9% on stronger earnings across its steel units, Oracle rose 1.2% on speculation it could be involved in a TikTok deal, and Chipotle gained 1.2% after authorising a fresh $500 million share buyback.Overseas, Japan’s Nikkei 225 added 0.3% to close at a record despite political uncertainty after Prime Minister Shigeru Ishiba announced plans to step down, with a ruling party leadership vote scheduled for October 4. European markets, however, slipped after a mixed Asian session.In bonds, the 10-year Treasury yield edged down to 4.03% from 4.05% late Monday.