Stocks mixed as oil slides, Fed rate decision looms

Stocks ended mostly lower Tuesday as investors reacted to a resumed slide in oil prices and braced for the Federal Reserve's decision Wednesday on interest rates.

Down were the Nasdaq and the S&P 500, off 0.5% and 0.2%, respectively. Finishing higher was the Dow Jones industrial average, which climbed 0.1%. The other two benchmarks stayed negative the whole day, with the blue chips popping into positive territory about mid-afternoon and finishing at session highs.

A major driver of the recent stock market rally has been a sharp rebound in oil prices. But U.S.-produced crude has reversed course the past two trading sessions and has resumed its fall amid fresh worries about oversupply, weighing on market sentiment.  A barrel of West Texas Intermediate crude was down 85 cents, or 2.3%, to $36.33. Crude prices fell more than 3% on Monday.

Wall Street is also treading cautiously ahead of the Fed's policy decision on borrowing costs Wednesday. While investors are not expecting a rate hike from the Janet Yellen-led Fed, they will be on watch for any surprises as well as trying to decipher clues about rates going forward from the Fed's statement, its updated economic projections and Yellen's comments at a post-meeting press conference.

Fed faces challenge as it considers more rate hikes

Wall Street was also reacting to fresh readings on February retail sales, inflation at the producer level as well as a March reading on manufacturing in the New York region. Investors will be eyeing the data through the prism of the Federal Reserve, as the U.S. central bank is closely monitoring the health of the U.S. economy and inflation as it debates whether to hike interest rates further.

Retail sales fell last month, but less than economists had expected. Consumer purchases at the nation's retailers dipped 0.1%, the Commerce Department said Tuesday. Economists expected a 0.2% drop. On a negative note, January sales were revised downward.

Retail sales slip on falling gas prices; January's total revised down

Investors were also digesting the decision of the Bank of Japan not to slash interest rates further, after surprising markets back in January when it cut rates into negative territory for the first time. The BoJ left rates unchanged and didn't boost its stimulus measures currently in place. However, the BoJ did downgrade its economic outlook and said inflation continues to come in under projections.

Stocks were trading in the red around the globe. In Europe, the broad Stoxx Europe 600 was down 1.1%, while Germany's DAX was off 0.6% and the CAC 40 in Paris was  0.8% lower.

In Asia, Japanese shares fell, with the Nikkei 225 closing down 0.7%. Hong Kong's Hang Seng index declined 0.7%. But shares in mainland China bucked the trend, rising 0.2%.