June 11 (Reuters) - Wall Street's main indexes declined on Tuesday as caution dampened investor enthusiasm ahead of a crucial inflation reading and a policy announcement from the Federal Reserve expected this week.
Shares of Apple (AAPL.O), opens new tab recovered 2 .1% to hit a record high after declining in the previous session following its long-awaited AI strategy, presented at a developer conference.
However, major banks including JPMorgan Chase & Co (JPM.N), opens new tab, Citigroup (C.N), opens new tab and Bank of America (BAC.N), opens new tab dropped over 2%, sending the broader banking index (.SPXBK), opens new tab down to a seven-week low.
The S&P 500 (.SPX), opens new tab and the Nasdaq (.IXIC), opens new tab posted record closing highs on Monday in a choppy session, boosted by shares of Nvidia (NVDA.O), opens new tab after its 10-for-one stock split.
Markets are readying for Wednesday's release of the Consumer Price Index report for May and the conclusion of the Fed's two-day policy meeting.
"There's an abnormal amount of anxiety around these numbers and around the Fed meeting, particularly after the jobs report on Friday," said Thomas Hayes, chairman at Great Hill Capital LLC.
The central bank is not expected to change rates but will release its updated economic projections and "dot plot", which shows where policymakers expect interest rates to stand over the next few years and in the longer term.
The CPI numbers and the Fed's projections will be scrutinized closely as recent reports have sent out conflicting signals on the economy's underlying health.
"If they (Fed policymakers) take down growth a bit, then they will have cover to keep two dots on the dot plot, which would be very bullish for markets. So this trepidation you're seeing is a fear of 'what if that doesn't happen'," Hayes said.
Markets are pricing in a 54.4% chance of the Fed's first rate cut happening in September, according to the CME's FedWatch tool. Rate futures also imply just one cut this year, compared to two before Friday's bumper Nonfarm Payrolls data.
Other rate-sensitive growth stocks slipped, with Microsoft (MSFT.O), opens new tab, Meta Platforms (META.O), opens new tab and Amazon.com (AMZN.O), opens new tab falling between 0.4% and 0.7%, while Tesla (.TSLA.O), opens new tab dropped over 3% to an over one-month low.
At 9:43 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab was down 316.10 points, or 0.81%, at 38,551.94, the S&P 500 (.SPX), opens new tab was down 20.73 points, or 0.39%, at 5,340.06, and the Nasdaq Composite (.IXIC), opens new tab was down 10.86 points, or 0.06%, at 17,181.67.
Ten of the S&P 500's 11 sectors declined, with energy (.SPNY), opens new tab, utilities (.SPLRCU), opens new tab and financials (.SPSY), opens new tab all losing over 1% each. The small-caps Russell 2000 Index (.RUT), opens new tab also dropped 1 %.
Prison operators CoreCivic (CXW.N), opens new tab and Target Hospitality (TH.O), opens new tab slumped 23.2% and 37.1%, respectively, after the U.S. Immigration and Customs Enforcement said it would close a detention center in Texas.
Cryptocurrency-linked stocks slipped as bitcoin slid 3.8%, with bitcoin miners Riot Platforms (RIOT.O), opens new tab and Marathon Digital (MARA.O), opens new tab and crypto exchange Coinbase (COIN.O), opens new tab falling between 5.7% and 8.8%.
General Motors (GM.N), opens new tab gained nearly 1% after the automaker announced a $6 billion share buyback plan.
Cleveland-Cliffs (CLF.N), opens new tab dropped 2.75% after brokerage J.P.Morgan downgraded the steel stock to "neutral" from "overweight".
Declining issues outnumbered advancers by a 4.00-to-1 ratio on the NYSE, and by a 2.88-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and two new lows, while the Nasdaq recorded nine new highs and 53 new lows.
Reporting by Lisa Mattackal and Johann M Cherian in Bengaluru; Editing by Pooja Desai
