Wall Street saw a modest pullback, partly due to profit-taking after recent gains that pushed the Nasdaq and S&P 500 to their highest closing levels in a month. Trading activity remained subdued as investors awaited the Federal Reserve's monetary policy decision on Wednesday.

The Fed is widely expected to cut interest rates by a quarter point, with CME Group's FedWatch Tool showing an 89.4% likelihood of such a move but only a 60.5% chance of no change in January. Analysts suggest markets may not rally on the expected cut, reacting only if the Fed surprises with a larger or no cut at all.

Gold stocks moved sharply lower, dragging the NYSE Arca Gold Bugs Index down by 2.1%. Biotechnology stocks was significantly weak, as reflected by the 1.6 loss posted by the NYSE Arca Biotechnology Index. Utilities, natural gas and healthcare stocks saw notable weakness while networking, computer hardware and semiconductor stocks saw some strength on the day.

Asia-Pacific stocks turned in a mixed performance. Japan's Nikkei 225 Index crept up by 0.2% and China's Shanghai Composite Index rose by 0.5% while Hong Kong's Hang Seng Index slumped by 1.2%. The major European market indexes ended the day on opposite sides of the unchanged line while the German DAX Index crept up by 0.1, the French CAC 40 Index edged down by 0.1% and the U.K.'s FTSE 100 Index dipped by 0.2%.

In the bond market, treasuries are extending the downward move seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, is up by 4.3 bps at 4.18%.

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