Markets Await Fed Decision as TikTok Ban Extension Adds to Uncertainty

Investors braced for volatility as the S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ) closed lower ahead of Wednesday's Federal Reserve meeting. The central bank is widely expected to initiate its first rate cut since December 2024, with markets pricing in a 25 basis point reduction.

Consumer resilience surprised economists as August retail sales jumped 0.6% month-over-month, nearly triple the consensus estimate. The Core measure excluding autos and gasoline rose 0.7%, suggesting persistent demand despite elevated borrowing costs. "Households still generally have the means to spend, but growing concerns over the labor market suggest we'll likely see a pullback in spending growth," noted Wells Fargo senior economist Sam Bullard.

The TRUMP administration granted ByteDance its fourth TikTok ban extension, pushing the divestiture deadline to December 16. The continued reprieve for the social media platform comes amid ongoing negotiations over its US operations.