Investors are assessing the potential effects of a Fed hike while central banks across much of Europe and Asia are in the midst of easing cycles. Fed-funds futures currently reflect a 24 percent chance the Fed will increase borrowing costs at the September meeting, down from 36 percent before the services data. Odds had reached as high as 42 percent late last month. The first meeting with a better-than-even chance of a hike is in December.
The S&P 500 has been treading water since reaching a fresh record in mid-August, amid monetary-policy speculation and lackluster data. The gauge has held in a band of 1.5 percent for 38 days, the narrowest ever for that length of time. It closed Friday 0.5 percent from its all-time high. The VIX rose 1.9 percent Tuesday to 12.21, after its biggest one-day drop in two months.
Among other shares moving on corporate news, Navistar International Corp. soared 43 percent, the most since 1987. Volkswagen AG is buying a stake in the company to gain a foothold in the U.S. heavy-truck market, as the German automaker still grapples with the fallout from the emissions-cheating scandal.
This article was provided by Bloomberg News.