The U.S. central bank is widely expected to cut interest rates for the first time this year, despite the economy sending mixed signals.

Economists and investors anticipate a quarter percentage point cut as reports suggest the jobs market is weaker than previously believed. Economists surveyed by Bloomberg expect one or two more rate cuts to follow in 2025.

The Federal Reserve's two-day policy-setting meeting begins Tuesday. Policy committee members may be divided on their decision and forecasts.

The Federal Reserve is expected to cut its benchmark interest rate by a quarter of a point when it meets on Wednesday, the first cut in about a year. It has been described by those who watch the Fed as the most unprecedented meeting in many years due to political pressure from President Trump.

The S&P 500 and the Nasdaq were subdued in choppy trading on Tuesday, as investors turned cautious ahead of an anticipated interest rate cut from the Federal Reserve on Wednesday and assessed the latest retail sales reading.