NEW YORK (CNN/Money) - Investors Tuesday turn their attention to what the Federal Reserve will do with interest rates for the rest of the year after a policy setting meeting expected to bring no immediate change in borrowing costs.

Early indications point to a lower start for the major indexes, which have been falling despite 11 rate cuts from the Fed last year.

The latest economic data showed that retail sales rose 1.2 percent in July, matching forecasts, as Americans continued to buy automobiles. Excluding autos, retail sales gained 0.2 percent, the government said.

The Fed's decision won't come until about 2:15 p.m. ET, less than two hours before the closing bell. So the trading that takes place before that will reflect wariness about the meeting and rates.

While there has been a clamor for a rate cut in light of recent economic reports showing renewed weakness, the Fed isn't expected to make a move Tuesday. But it might signal a possible cut at a later meeting with its statement.

Of the 22 primary dealers that do business with the Fed, only one, Morgan Stanley, expects a rate cut Tuesday, according to a Reuters poll. The Fed has kept the overnight interbank lending rate at a 40-year low since December.

For details about Monday's market activity, click above

Meanwhile, in Waco, Texas, President Bush is convening a forum to discuss the economy and what can be done to strengthen it. The invitees include corporate executives and small business owners, but the meeting is expected to have little impact on Tuesday's market activity.

With little inflation and strong demand for new cars and homes, the economy is not headed for another recession, Treasury Secretary Paul O'Neill said from Waco.

"With accommodative monetary policy, I think we are in the right place and moving in the right direction," O'Neill told CNNmoney Morning.

The Dow Jones industrial average is coming off a 56-point decline Monday, although the index did manage to pare a far steeper loss . The Nasdaq composite index nudged higher (see chart for Monday's activity).

Asia-Pacific stocks finished mixed Tuesday, with Tokyo's Nikkei index down 0.6 percent. European markets were lower in early trading.

Treasury prices rose in early trading, with the 10-year note yield falling to its lows for the year around 4.18 percent. The dollar slipped against the euro and was little changed against the yen.

Brent oil futures slipped 10 cents to $25.65 a barrel in London, where gold was lower in early trading.

Airline stocks will draw attention again Tuesday. AMR, the parent of American Airlines, said early Tuesday that it will undertake a restructuring that includes the cutting of 7,000 jobs and a reduction of its fleet. AMR shares fell $1.23 to $8.36 Monday, due mainly to the fallout from US Airways Group's bankruptcy filing.

As for US Air, it never opened for trading Monday. The New York Stock Exchange is reviewing whether the holding company for the nation's seventh-largest airline should remain listed on the exchange. Also, Credit Suisse First Boston reduced its rating on US Air (U: Research, Estimates) to "sell" following the airline's bankruptcy filing.

Wal-Mart Stores (WMT: Research, Estimates) reported second quarter net income of 46 cents a share early Tuesday, topping Wall Street forecasts by a penny a share. Shares of the No 1 retailer slipped 41 cents to $48 in pre-market trading.

After trading concludes, chip equipment maker Applied Materials (AMAT: Research, Estimates) is expected to post lower fiscal third-quarter earnings of 5 cents a share versus 8 cents a year earlier. The company's outlook will be closely watched for signs that a tech rebound is coming sometime. Applied stock slipped 8 cents to $13.50.

Shares of Kulicke & Soffa (KLIC: Research, Estimates), chip equipment maker, slipped $1.25 to $4.01 before hours. The company cut sales targets for the quarter ending next month.