Stock indexes retreated Tuesday as investors waited word from the Federal Reserve, which is beginning a two-day policy meeting on interest rates. Another drop in the price of oil pulled energy stocks to some of the biggest losses in the market. Stocks of smaller companies also took big hits.

ON WALL STREET: At the close, the Standard & Poor’s 500 index was down 8 points, about 0.3 percent, at 2,365.5. The Dow Jones industrial average lost 44.1 points, about 0.2 percent, to 20,837.4. The Nasdaq composite fell nearly 19 points, about 0.3 percent, to 5,856.8.

BOND MARKET: Bond prices rose. As markets closed, the yield on the 10-year Treasury note was down to 2.595 percent.

OIL PRICES: As markets closed, benchmark U.S. crude oil was down 50 cents at $47.90 per barrel in electronic trading on the New York Mercantile Exchange. In London on the Intercontinental Exchange Europe, Brent crude, which is used to price international oils, was down 25 cents at $51.10 a barrel. The price of crude oil has been slumping since late last month, when it was at nearly $55 per barrel.

SMALL STOCK PAIN: Smaller companies also sank more than the rest of the market. The Russell 2000 of small-cap stocks lost 7.1 points, about 0.6 percent, to close at 1,362.4, roughly double the decline of the S&P 500 index of the largest stocks. Smaller stocks have been some of the biggest winners since November’s election on expectations that President Donald Trump’s “America-first” policies will help the domestic economy, perhaps at the expense of foreign trade. Smaller companies tend to get more of their revenue from U.S. customers than the huge multinational companies in the S & P 500.

A survey released Tuesday showed that optimism among small businesses dipped modestly in February, though it still remains well above where it was before the election.

FED MEETING: When the Fed finishes its meeting on Wednesday, most economists expect it to raise interest rates by a quarter of a percentage point. It would be only the third increase since the Fed slashed rates to a record of nearly zero in 2008 during the financial crisis.

advertisement | advertise on newsday

What investors are likely more interested to hear is what Fed Chair Janet Yellen says about the pace of future increases. The job market, stock prices and optimism among shoppers have all picked up momentum in recent months, which raises expectations for more increases.

Inflation has also been picking up, though the recent drop in oil’s price may act as a drag. A report Tuesday showed that prices at the wholesale level rose 0.3 percent last month from January. That’s half of January’s 0.6 percent inflation rate. From a year ago, prices at the wholesale level were up 2.2 percent.

A NEW REACTION: In the past, expectations for higher rates may have spooked stock investors, because more-expensive borrowing can slow the economy. But that’s not happening this time.

“We’re in an environment now where the market is no longer afraid of Fed hikes because the perception now is the Fed is hiking for the right reasons,” said analyst Jon Adams, senior investment strategist at BMO Global Asset Management.

As long as the economy continues to improve and interest-rate hikes are only gradual, analysts say stocks can maintain their lofty heights.

One key risk, Adams said, is that many of the encouraging data points from recent months have come from opinion surveys, such as confidence levels for consumers and purchasing managers. He’d like to see that optimism translate into more action by shoppers and businesses before getting more confident, whether that’s by spending or producing more.