North American stocks tumbled on Tuesday as investors who expected an aggressive U.S. interest rate cut were disappointed by a more modest move.

The U.S. Federal Reserve cut the key fed funds rate by 25 basis points to 4.25%. Traders had fully priced in the quarter point cut but had been hoping for a half point decline in rates.

In Toronto, the S&P/TSX composite index was down 216.65 points, or 1.55%, to close at 13,723.71.

Nine of the 10 TSX main subgroups moved lower, including the materials group which fell 2.92%.

First Quantum Minerals fell $4.67, or 4.8%, to $92.70. Inmet Mining shares tumbled $4.13, or 4.6%, to $84.98.

Gold prices advanced, with the February bullion contract on the New York Mercantile Exchange rising US$3.60 to US$817.10 an ounce.

Energy issues fell 1.62% even as the January crude contract on the New York Mercantile Exchange gained $2.16 to US$90.02 a barrel.

Suncor Energy lost $2 to $102.25

The financials group, which is sensitive to rate moves, gave up 1.15%.

Royal Bank shares shed 76¢ to $52.31 and TD Bank fell 73¢ to $72.67.

The junior S&P/TSX Venture composite index fell 26.20 points, or 0.95%, to end at 2,725.07.

The Canadian dollar was also caught up in the tumble, as it fell 0.83 of a cent to close at US98.58¢.

In New York, stocks sank on after the Fed trimmed interest rates rather than slashing them.

The Dow Jones industrial average slid 294.26 points, or 2.14%, to end at 13,432.77. The S&P 500 dropped 38.31 points, or 2.53%, to 1,477.65. The tech-heavy Nasdaq composite index lost 66.60 points, or 2.45%, to 2,652.35.