Markets cool after last week’s heights

All three indices slip after signs economy remains strong

NEW YORK — Stocks slipped Monday following the latest signal that the economy remains strong, which could delay the cuts to interest rates that Wall Street wants.

The S&P 500 fell 15.80 points, or 0.3 percent, to 4,942.81 from the all-time high set Friday. The Dow Jones Industrial Average dropped 274.30, or 0.7 percent, to 38,380.12, and the Nasdaq composite edged down by 31.28, or 0.2 percent, to 15,597.68.

Earnings season is near its midpoint, and roughly half the companies in the S&P 500 have reported their latest results, including many of the market’s most influential. Estee Lauder jumped 12 percent after it reported better revenue and profit than analysts expected. Mcdonald’s, meanwhile, fell 3.7 percent despite reporting stronger profit than expected. Its revenue for the latest quarter fell just short of forecasts.

Companies that have been missing analysts’ estimates for earnings this reporting season have been seeing their stocks get punished even more than usual, according to strategists at Bank of America.

Stocks broadly felt pressure from another jump for yields in the bond market. They rose as traders on Wall Street delayed their expectations for when the Federal Reserve will begin cutting its main interest rate.

The Fed has yanked the federal funds rate to its highest level since 2001 to bring down high inflation. High rates intentionally slow the economy by making borrowing more expensive and hurting investment prices.

Federal Reserve Chair Jerome Powell said again in an interview broadcast Sunday that the Fed may cut interest rates three times this year because inflation has been cooling. But he also indicated again in the interview on “60 Minutes” that the Fed is unlikely to begin in March, as many traders had earlier hoped.

Following the interview, traders pushed out some bets for the cuts to begin in June instead of May, according to data from CME Group.

At Goldman Sachs, economist David Mericle is still forecasting cuts to begin in May. Following Sunday’s interview, though, he sees a greater chance of rate cuts beginning later than that and happening in a steeper fashion.

The yield on the 10-year Treasury climbed to 4.16 percent from 4.09 percent late Friday and from less than 3.80 percent late last year.