(Bloomberg) — US equities were dragged down by technology stocks as traders weighed strong US retail sales data and awaited the Federal Reserve’s rate decision and its forecasts.

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The Nasdaq 100 fell 0.5% while the S&P 500 declined 0.4%. Nvidia Corp. was one of the biggest decliners, down as much as 3.9%. The yield on 10-year Treasuries dropped two basis points to 4.38%. Bloomberg’s dollar gauge fluctuated.

US retail sales increased at a firm pace in November, underscoring consumer resilience during the crucial holiday shopping season.

“There is nothing within the report that will alter expectations for tomorrow’s FOMC as a quarter-point cut remains the consensus, alongside the understanding that Jerome Powell will prepare the market for a pause in early 2025,” said Ian Lyngen of BMO Capital Markets.

Industrial production data also came in Tuesday, declining for a third month in November.

Traders will now be focusing on Wednesday’s Fed announcement — its last rate decision of the year. A quarter-point cut is widely expected, but what happens in the following months is less clear. While the US economy is resilient, the prospect of inflationary import tariffs threatened by the incoming administration of Donald Trump may give Fed officials pause about the pace of further moves.

“Whether tomorrow’s Fed decision is positive, negative or neutral for stocks and bonds likely won’t be determined by any actual rate cut, but instead by what the FOMC says about cuts in 2025,” wrote Tom Essaye, president and founder of Sevens Report and a former Merrill Lynch trader.

More strong economic data like retail sales could bolster the case for the Fed to pause in January, said Chris Larkin, managing director, trading and investing, E*Trade from Morgan Stanley.

In Canada, inflation dropped below the central bank’s target for the second time in three months. The data is expected to give Bank of Canada officials confidence that their rapid rate cuts didn’t derail their efforts to keep price gains at the 2% target.

Elsewhere, money markets continued to trim wagers on Bank of England interest-rate cuts as attention turns to Wednesday’s UK November inflation figures. Traders place the chance of a third quarter-point reduction next year at 25%, down from 90% on Monday. Gilt yields rose.

Earlier, index of Asian currencies fell to the lowest in more than two years amid pessimism over China’s economic outlook and expectations that Trump policies will drive gains in the greenback.

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