The Dow shed three-tenths of a percent, while the S&P 500 and Nasdaq each dipped about two-tenths.
Though the Fed is expected to announce Wednesday that it will leave interest rates unchanged, it will also release its projections for potential future rate hikes, inflation and economic growth.
Meanwhile, the IPO market continued to show signs of life, with grocery delivery app Instacart's parent company Maplebear making its Nasdaq debut, days after chipmaker Arm Holdings' stellar entry to the public marketplace.
Maplebear shares jumped more than 12%, while Arm Holdings lost nearly 5%.
Thomas Martin, Senior Portfolio Manager at GLOBALT Investments, says Arm's volatility is due to it being a tech company whose value is often tied to interest rates.
"When the supply and demand and excitement over a new asset to own dies down, it will go back to the metrics that are associated with its end markets and its end users and its technology. So it is very exciting, but those companies that are trading at fairly high multiples, with interest rates high, they're going to be subject to that kind of volatility. So, welcome to the world, glad you got a good start, Arm - but now you're gonna have to battle just like everybody else."
In other company news, shares of Walt Disney slid more than three-and-a-half percent after the company announced it would nearly double its capital expenditure for its parks business over the next 10 years.
And Starbucks shares shed one-and-a-half percent following TD Cowen's decision to downgrade the coffee chain's shares to "underperform."
