By David Hodari and Corrie Driebusch 

U.S. stocks wavered Tuesday as a slide in oil prices stymied an attempted rebound by major indexes.

An accelerating decline in the price of oil dragged energy companies deeper into the red for the year, and in late-afternoon trading dragged major indexes lower. The Dow Jones Industrial Average turned negative in recent trading, after earlier rising as many as 334 points.

Besides the selloff in energy stocks and oil futures, it was a relatively subdued day in the stock market, as many traders said they were looking ahead to the Federal Reserve's policy decision Wednesday and any announcements that come with it as the next catalyst for stock swings.

The Dow industrials slipped 13 points, or 0.1% and the S&P 500 declined 0.4%.

The drop in oil prices due to persistent fears of growing supply also spooked some investors. U.S.-traded crude oil fell another 7.3% Tuesday to $46.24 a barrel, putting its losses since Oct. 1 at more than 35%. Energy stocks in the S&P 500 lost 2.4%.

Both the Dow industrials and the S&P 500 are down more than 7.5% in December, on pace for their worst month since May 2010 in the midst of the European debt crisis. The Nasdaq Composite shed 0.1%.

The recent selloff sent the blue-chip index, the S&P 500 and the tech-heavy Nasdaq Composite tumbling into correction territory. Monday's 2.3% fall for the Russell 2000 index of small-capitalization stocks put it in bear-market territory for the first time since 2016.

"There's definitely a lot of concern out there," said Matthew Turner, European economist at Macquarie. "We still think the data point to trend growth but markets are forward-looking and if you look at the history of equities prices, they tend to peak before recessions start. They can, by themselves, push us towards one."

Worries about the state of markets around the globe are growing. More than half of fund managers surveyed in Bank of America Merrill Lynch's monthly report expect weakening global growth in 2019 -- the worst outlook since October 2008.

This week's main focus for investors is the Fed's policy decision on Wednesday, when the central bank is widely expected to raise short-term interest rates. Investors are increasingly expecting -- and hoping for -- more dovish commentary from Fed Chairman Jerome Powell on the path of rates for next year.

Mr. Powell has given mixed signals on Fed policy in recent months, spooking investors in October by saying rates were "a long way from neutral," referring to the point at which interest rates are neither spurring nor slowing economic growth. He later backtracked on those comments in November, saying rates were "just below" neutral.

Dovish guidance from the Fed may have mixed implications for markets, however.

"On the one hand, markets may see an even-less-hawkish-than-expected hike as a relief, but if the Fed acknowledges fears about growth it's not as straightforward," said Geoffrey Yu, head of the London investment office at UBS Wealth Management. "Right now, we're at a level where market pricing is not consistent with underlying economic data."

The latest criticism of the Fed from President Trump added to investors' unease. Mr. Trump tweeted that it was "incredible" that the Fed's board was considering raising interest rates again.

The yield on the 10-year Treasury note fell to 2.849% from 2.857% on Monday. Yields fall when prices rise.

While many investors said they would be watching the Fed's commentary closely, they said when it comes to the market's trajectory in 2019, global growth trumps all.

"The biggest risk is tariffs and a global slowdown," said Michael Borgen, chief investment officer of Sapphire Star Capital. Trade concerns and geopolitical worries have led traders to sell companies that do business overseas, including industrial firms and tech stocks.

In Europe, the Stoxx Europe 600 index was 0.8% lower, weighed down by a fall in its oil-and-gas sector.

Stocks sold off more heavily in Asia, where Japan's Nikkei fell 1.8% and Hong Kong's Hang Seng traded 1% lower. Most other indexes fell by slightly less.

Write to David Hodari at David.Hodari@dowjones.com and Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

December 18, 2018 15:43 ET (20:43 GMT)

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