All three indexes closed in negative territory after a consumer expectations survey from the New York Federal Reserve showed deteriorating future expectations and rising inflation projections

U.S. stocks closed lower on Tuesday as investors, deprived of economic data resulting from the shuttered government, looked to secondary indicators and remarks from the country’s central bank officials for clues regarding economic weakness and monetary policy.

All three indexes closed in negative territory after a consumer expectations survey from the New York Federal Reserve showed deteriorating future expectations and rising inflation projections. The report garnered increased scrutiny amid a federal data blackout resulting from a partisan congressional impasse that extended the government shutdown to its seventh day.

Investors have had to rely on secondary, independently produced data, along with remarks from monetary policymakers, to gauge the likelihood that the Federal Reserve will implement its second rate cut of the year at this month’s policy meeting.

The New York Fed report probably gave traders an excuse to take some profits since the S&P had been up for seven days in a row, said Sam Stovall, chief investment strategist of CFRA Research in New York. There is an awful lot of uncertainty the longer the government remains shut down because of the absence of any economic data.

Economically sensitive sectors, including homebuilding, housing, airlines, and transport underperformed the broader market.

The market is still very much centred on AI driving everything, and I think some of the bloom is off the rose, said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest in Elmhurst, Illinois.

Fed Governor Stephen Miran stated his case for continued rate cuts, stressing the risks of keeping policy too restrictive.

The Dow Jones Industrial Average dropped 91.99 points, or 0.20%, to 46,602.98, the S&P 500 shed 25.69 points, or 0.38%, to 6,714.59 and the Nasdaq Composite declined 153.30 points, or 0.67%, to 22,788.36.