The S&P 500 and the Nasdaq pared earlier losses on Tuesday as caution set in ahead of an anticipated interest rate cut from the Federal Reserve, while declines in healthcare stocks weighed on the Dow.

Investors are largely still pricing in a 25 basis-point cut from the U.S. central bank at the conclusion of its two-day meeting on Wednesday, to offset the deterioration in the U.S. labor market, evidenced by numerous recent economic indicators.

Data on Tuesday showed that U.S. retail sales increased more than expected in August, but that did little to change rate cut expectations.

“Any kind of resilient economic data will only reaffirm the hawks on the FOMC … and could give a little bit of fuel for (Fed Chair Jerome) Powell to come out as slightly more hawkish than the market is hoping for,” said Ross Mayfield, investment strategist at Baird Private Wealth Management.

The S&P 500 utilities and real estate sectors lost 1.44% and 0.66% respectively, leading declines among peers. The CBOE Volatility Index climbed to its highest level in more than a week, and was last at 16.04 points.

Losses in UnitedHealth Group and insurance company Travelers bogged down the Dow.

At 2:20 p.m. EDT, the Dow Jones Industrial Average fell 123.34 points, or 0.27%, to 45,760.82, the S&P 500 lost 5.87 points, or 0.09%, to 6,609.41 and the Nasdaq Composite lost 8.96 points, or 0.04%, to 22,339.79.

There were some gains in sectors such as energy and consumer discretionary, which were up 1.98% and 0.81%, respectively. Tesla helped lift the consumer discretionary sector.

Investors also brushed off news that the U.S. Senate confirmed White House economic adviser Stephen Miran to the Fed Board and an appeals court rejected President Donald Trump’s bid to fire Fed Governor Lisa Cook.

The S&P 500 and the Nasdaq closed at all-time highs on Monday after hitting intraday records in multiple sessions. The three main indexes have gained so far in September – a month traditionally deemed bad for U.S. equities.

Webtoon Entertainment soared 37% after a deal with Disney to create a new digital comics platform to feature content from Disney’s portfolio, including the Marvel and “Star Wars” franchises.

Trump said that the U.S. and China have a deal that will keep the short-video app TikTok operating in the U.S. CNBC, citing sources, said Oracle will keep its TikTok cloud deal under the new agreement. It gained 1%.

Warner Bros Discovery fell 6.7%. TD Cowen downgraded the media company’s rating to “hold” from “buy.”

Declining issues outnumbered advancers by a 1.26-to-1 ratio on the NYSE and by a 1.11-to-1 ratio on the Nasdaq.

The S&P 500 posted 13 new 52-week highs and 13 new lows, while the Nasdaq Composite recorded 75 new highs and 55 new lows.

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(Reporting by Abigail Summerville in New York and Purvi Agarwal and Sukriti Gupta in Bengaluru; Editing by Maju Samuel and Matthew Lewis)