US stocks drop with investors waiting for Fed next's policy move as inflation accelerates

• US stocks dropped Tuesday before the Federal Reserve begins its policy meeting.
• The Fed will have to confront high inflation and Omicron concerns.

US stocks fell Tuesday as nervousness among investors set in as the Federal Reserve begins its last policy meeting of 2021 with hot inflation and the spread of a new coronavirus variant at hand.

The Nasdaq Composite paced declines among Wall Street's big stock indexes and the S&P 500 was headed for a second straight fall, pulling further away from the record high it set at the end of last week.

Here's where US indexes stood at 9:30 a.m. on Tuesday:

• S&P 500: 4,639.68, down 0.63%
• Dow Jones Industrial Average: 35,577.84, down 0.21% (73.11 points)
• Nasdaq Composite: 15,235.54, down 1.21%

The Fed will start its two-day policy meeting later Tuesday with the latest wholesale inflation report available. That report showed a rise to a 9.6% rate in November. Alongside that, worries about the omicron virus strain were picking up again as China reported its first case of the variant. Concerns about new restrictions have also emerged, with Hong Kong over the weekend saying travelers returning from the US will have to quarantine for a week in a state-run facility.

Around the markets, dogecoin soared after Elon Musk said Tesla will let people purchase some of its merchandise with the meme cryptocurrency.

Oil prices dropped. West Texas Intermediate crude slumped 1.7% to $70.05 per barrel. Brent crude, the international benchmark, lost 1.4% at $73.36.

Gold dropped by 1% to $1,769.60 per ounce. The 10-year yield rose 3 basis points to 1.440%.

Bitcoin rose by 0.3%, at $47,026.