WALL STREET: On Monday, broad selling knocked U.S. indexes to their lowest levels in over a year. Investors sold almost everything, from technology and retail stocks to steadier high-dividend companies. Less than 40 of the 500 stocks in the broad S&P 500 index finished the day higher. Stocks were set to recover slightly on Tuesday. S&P 500 and Dow futures both rose 0.3 percent.
FED MEETING: The Federal Open Market Committee begins a two-day meeting on Tuesday. It is expected to raise its short-term interest rate by a modest quarter-point, to a range of 2.25 percent to 2.5 percent a day later. The rate is used as a benchmark for many consumer and business loans. Investors fear more monetary tightening would weigh on U.S. growth, and eventually, the global economy, which is already expected to slow in 2019 because of trade tensions. President Donald Trump tweeted that it was "incredible" the Fed was considering another rate hike, with "a very strong dollar and virtually no inflation." The central bank forecasts three more rate hikes in 2019.
ANALYST'S TAKE: "Despite Donald Trump's recent overture, the Fed looks set to hike rates again on Wednesday with market players anxious to see if the economy can handle more policy tightening given expectations for slowing growth," ING economists Nicholas Mapa and Prakash Sakpal said in a commentary.
GERMANY GLOOM: Business confidence took a hit in Europe's largest economy. The Ifo Institute said Tuesday its business confidence index dropped to 101.0 points for December from 102.0 points in November as managers' view of both their current circumstances and their prospects for the next six months fell. That comes as the German DAX stock index entered a bear market this week, down over 20 percent from a January high.
ASIA'S DAY: Japan's Nikkei 225 index was 1.8 percent lower at 21,115.45 and the Kospi in South Korea dropped 0.4 percent to 2,062.11. Hong Kong's Hang Seng slid 1.1 percent to 25,814.25. The Shanghai Composite index dipped 0.8 percent to 2,576.65. Australia's S&P ASX 200 was down 1.2 percent at 5,589.50. Shares were lower in Taiwan and Southeast Asia.
ENERGY: Oil prices tumbled on worries about oversupply and softening growth in China, which could hit demand. Benchmark U.S. crude shed $1.34 to $48.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.32 on Monday. Brent crude, used to price international oils, gave up $1.37 to $58.24 a barrel. It lost 67 cents the day before.
CURRENCIES: The dollar weakened to 112.27 yen from 112.83 yen in late trading Monday. The euro rose to $1.1395 from $1.1349.