Shares of banks and other financial institutions tumbled as the next Federal Open Market Committee decision is looming over the market.

Investors are grappling not just with whether the central bank will make a 75 basis point rate increase or lift rates by 100 points, but also how high the Fed will signal rates will go in the future. The meeting started Tuesday and will conclude on Wednesday.

Fed officials have made clear they are willing to accept a recession if it is the price of slowing the pace of inflation. Data last week showed inflation remained strong, cementing expectations the central bank will keep raising rates.

Republican attorneys general of 23 states are warning Visa, Mastercard and American Express not to move forward with their plan to add a new code to identify when purchases are made at firearms retailers. The attorneys general said in a letter that the card companies' plan could lead to the misuse of consumer data and wouldn't protect the public.

Morgan Stanley will pay $35 million to settle allegations that it scrapped computer servers and hard drives without ensuring they no longer held sensitive customer information, regulators said.

The nation's largest pension fund got a scathing performance review Monday when its new investment chief highlighted the retirement system's underperforming returns and estimated it missed out on $11 billion in gains during a "lost decade" for private equity. The unusually candid presentation to board members of the California Public Employees' Retirement System, known as Calpers, showed returns lagging behind other large pensions in almost every asset class during the past 10 years, with private equity trailing the most, 1.3 percentage points.

Chamath Palihapitiya, one of the biggest promoters of SPACs is shutting down two deal-making efforts that together hold more than $1.6 billion after the market collapsed, wiping out tens of billions in startup market value and punishing individual investors.


Write to Amy Pessetto at amy.pessetto@dowjones.com

(END) Dow Jones Newswires

09-20-22 1703ET