Wall Street slips as rates stay high

Most U.S. stocks slipped Tuesday, and Treasury yields rose on expectations that interest rates may stay high for a while.

The S&P 500 fell 10.41 points, or 0.2%, to 5,051.41. The index deepened its loss from the day before, when it sank under the pressure brought by a jump in Treasury yields. The Dow Jones Industrial Average rose 63.86, or 0.2%, to 37,798.97, and the Nasdaq composite fell 19.77, or 0.1%, to 15,865.25.

A 5.2% climb for UnitedHealth helped support the market after the insurer reported stronger results for the first three months of the year than analysts expected. Morgan Stanley was another winner, rising 2.5%, after likewise topping expectations.

But the majority of stocks fell as Treasury yields rose following comments by Federal Reserve Chair Jerome Powell. They've been climbing rapidly as traders give up hopes that the Fed will deliver many cuts to interest rates this year. High rates hurt prices for all kinds of investments and raise the risk of a recession in the future.

Powell said at an event Tuesday that the central bank has been waiting to cut its main interest rate, which is at its highest level since 2001, because it first needs more confidence inflation is heading sustainably down to its 2% target.

“The recent data have clearly not given us greater confidence and instead indicate that it's likely to take longer than expected to achieve that confidence,” he said, referring to a string of reports this year that showed inflation remaining hotter than forecast.

He suggested if higher inflation does persist, the Fed will hold rates steady “for as long as needed.” But he also acknowledged the Fed could cut rates if the job market unexpectedly weakens.

Treasury yields climbed immediately after Powell's comments. They had already been higher after the Fed's vice chair made similar comments earlier in the day.