Stocks fell sharply Tuesday, led by bank shares, as investors prepared for another possible interest-rate hike by the Federal Reserve.

The Dow Jones Industrial Average fell more than 500 points, or 1.5%, in trading shortly before noon. The tech-heavy Nasdaq and the S&P 500 also cratered.

The Fed will announce Wednesday whether it’s imposing its 10th rate hike since March 2022 to fight inflation. The Consumer Price Index rose 0.1% in March at an annual rate of 5%, well above the central bank’s target rate of 2%.

Rising interest rates have created cash shortages at some banks as customers withdraw their money in search of better returns.

Regulators on Monday seized San Francisco-based First Republic Bank and struck a deal with JPMorgan Chase to take over most of its assets.

It was the second-largest bank failure in U.S. history.

• Dave Boyer can be reached at dboyer@washingtontimes.com.