01:44 PM EST, 12/17/2024 (MT Newswires) -- US equity indexes fell after midday Tuesday as retail sales beat expectations, increasing the bumps on the Federal Reserve's policy easing path.

The S&P 500 retreated 0.4% to 6,049.2, with the Nasdaq down 0.3% to 20,112.1 and the Dow Jones Industrial Average 0.7% lower at 43,392.4. The energy sector was the standout decliner intraday, followed by financials. Real estate was among the trio of small gainers.

In economic news, US retail sales surged 0.7% in the seasonally strong November, the highest since 1.1% reported for the same month in 2021 and above the 0.6% expected in a survey compiled by Bloomberg. The previous month's print was 0.5%. Excluding motor vehicles and gasoline station sales, retail sales were still up 0.2% in November after a 0.2% gain in October.

Given the retail sales data, Q4 real consumption growth will likely be 2.6% quarter-over-quarter versus a previous estimate of 2.5%, Morgan Stanley said in a note. The figures reflect a "solid start to holiday spending."

Last week, the headline and core consumer price index rose in November, matching expectations. For the producer price index, the data came in hotter than forecast, abetting concern the Fed will pause its easing cycle after its widely anticipated 25 basis-point cut in December.

The Fed will release its policy statement and Summary of Economic Projections on Wednesday, followed by Chair Jerome Powell's press briefing. As of Tuesday afternoon, the highest probability is for only two rate cuts next year.

Further, in economic news, US industrial production fell by 0.1% in November, versus expectations for a 0.3% increase in a survey compiled by Bloomberg and a downwardly revised 0.4% drop in October.

The National Association of Home Builders' monthly housing market index was unchanged in December from 46 in November, below the 47 forecast in a survey compiled by Bloomberg. The index was above the 37 reported a year ago.

US Treasury yields were mixed intraday, with the 10-year down 1.8 basis points to 4.38% while the two-year shed 1.3 basis points to 4.24%.

In company news, Pfizer ( PFE ) projected higher earnings for 2025 and revenue in line with this year's likely result as the pharmaceutical giant looks to continue "disciplined execution" and cost cuts. Pfizer ( PFE ) shares jumped 4.6% intraday, the top performer on the S&P 500.

The worst performer on the index was Amentum (AMTM), down 11% intraday after reporting declines in fiscal Q4 adjusted earnings and sales.

West Texas Intermediate crude oil futures dropped 1.3% to $69.77 a barrel.

Gold fell 0.3% to $2,662.4 an ounce, and silver declined 0.4% to $30.93 per ounce.