investingLive Americas market news wrap: Oil continues to fall in the lead-up to the FOMC

• US May housing starts 1.177 million versus 1.430 million estimate
• US May import prices +1.9% vs +1.0% expected
• Trump says Iran deal should be successful, reiterates Iran will never have nuclear weapon
• Trump says he expects second stage of Iran deal to go quickly
• Fed preview: Warsh walks into a minefield -- a look at early stumbles of other Chairmen
• Oil falls further on a report that Iran could be allowed to immediately sell oil

Markets:

• S&P 500 down 0.6%
• Nasdaq down 1.1%
• WTI crude oil down $4.12 to $76.63
• US 10-year yields down 3 bps to 4.44%
• EUR leads, CHF lags
• Gold up $26 to $4333

Oil continued to plummet on Tuesday as it fell another $4. After the bell, the API private inventory numbers showed another huge drawdown in oil supplies and that's likely to continue for at least another week with the deal not set to be signed until Friday. In any case, the oil market is looking forward and sees the resumption of flows. Either that, or the oil longs are capitulating.

What's notable is that the cross-asset reaction isn't as big as you'd expect for a 4.5% decline in crude. US Treasury yields fell 2-3 bps and the FX market was largely unmoved on the day. Even oil equities had a skeptical look with the XLE ETF down just 0.3%.

In the broader equity markets, there was some profit taking in the Nasdaq to lead stocks lower. High flying Intel was knocked down 8% and looks like it could be forming a double top. Micron also formed and outside day and was down 6%. Broadcom and Nvidia were also lower but eyes were on SpaceX, which squeezed as much as 20% higher before finishing up just 4.8%.

Overall volatility was likely cooled by the Fed decision on Wednesday, which will be the first one from Kevin Warsh.

This article was written by Adam Button at investinglive.com.