Market Update: Selloff as Fed Meeting Kicks Off, Tech Leads Decline.

Wall Street investors headed for the exits Tuesday as all three major indices retreated sharply midway through the trading session, with rate-sensitive technology stocks bearing the brunt of the selling pressure.

By midday, the tech-heavy Nasdaq Composite had plunged 275.72 points, or 1.55%, to 17,532.9, while the S&P 500 shed 59.00 points, or 1.04%, to trade at 5,616.12. The Dow Jones Industrial Average fell 303.12 points, or 0.72%, to 41,538.5.

Market participants appear increasingly nervous ahead of Wednesday's Federal Reserve policy announcement and the release of the central bank's closely watched Summary of Economic Projections, which will offer fresh insights into policymakers' outlook for growth, inflation, and the future path of interest rates.

Shares of chip giant Nvidia (NVDA) slid nearly 2% despite anticipation building around CEO Jensen Huang's keynote address at the company's annual GTC conference, where announcements related to artificial intelligence technology are expected.

New Housing Data

On the economic front, housing data painted a mixed picture. Housing starts jumped 11.2% in February to an annualized rate of 1.5 million units, surpassing the 1.4 million recorded in January and beating the long-term average of 1.4 million units since 1959. However, building permits—a forward-looking indicator—edged down to 1.46 million from January's 1.47 million, suggesting potential caution among developers.

Meanwhile, the latest inflation readings showed persistent price pressures in international trade. The Bureau of Labor Statistics reported U.S. import prices increased 0.4% in February, matching January's rise, driven by higher costs for both fuel and non-fuel items. Export prices rose at a more modest 0.1% pace, significantly cooling from January's 1.3% surge. Year over year, import and export prices have climbed 2.0% and 2.1%, respectively.

All eyes remain on the Federal Reserve, with Goldman Sachs analysts forecasting the FOMC will revise its 2025 core PCE inflation projection upward by 0.3 percentage points to 2.8%, while simultaneously downgrading its 2025 GDP growth forecast to 1.8%, reflecting concerns about recently announced tariff policies.