Markets decline ahead of interest rate announcement

Sept. 20 (UPI) -- Stocks declined Tuesday as the market braces for the likelihood of a major increase to the benchmark interest rate this week from the U.S. Federal Reserve.

All three major U.S. indices were in the red on the first day of the Federal Open Markets Committee's two-day meeting, which is projected to end with a third consecutive 0.75% rate hike when it concludes Wednesday.

Fed Chair Jerome Powell will speak publicly after the announcement.

The Fed's last 0.75% in July raised the benchmark interest rate to between 2.25% to 2.5%.

The Nasdaq Composite fell 0.95%, losing 109.97 points and closing at 11,425.05.

The Dow Jones Industrial Average was down by 313.45 points, or 1.1%, ending the day at 30,706.23. The S&P 500 fell 43.96 points, or 1.13%, to 3,855.93.

Two-year Treasury note yields jumped to 3.99%, their highest level since 2007.

The stock sell-off extended across most sectors, including blue chip stocks, a day after markets rebounded slightly on Monday, following last week's major declines.

The Ford Motor Co. saw its worst day in 11 years. The Detroit auto maker's shares fell 12.32% on Tuesday, closing at $13.09 and losing $7 billion in market value.

The company partially pre-released its third quarter earnings report, which painted a less-than-rosy picture and included an additional $1 billion in unexpected supply chain-related costs.

"Investors have pretty well digested the 75 basis point hike tomorrow, but perhaps there's some concern that the rhetoric at the press conference could be still extremely hawkish," Cresset Capital's Jack Ablin told CNBC.