April gets even worse as it closes

NEW YORK — More worries about inflation and interest rates staying high knocked U.S. stocks lower on Tuesday as the market closed out its worst month since September.

The Standard & Poor’s 500 tumbled 1.6% to cement its first losing month in the last six. Its momentum slammed into reverse in April, falling as much as 5.5% at one point, after setting a record at the end of March.

The Dow Jones industrial average dropped 570 points, or 1.5%, and the Nasdaq composite lost 2%.

Stocks began sinking as soon as trading began after a report showed U.S. workers won bigger gains in wages and benefits than expected during the first three months of the year. While that’s good news for workers and the latest signal of a solid job market, it feeds into worries that upward pressure remains on the economy and inflation.

It followed a string of reports this year that have shown inflation remains stubbornly high. That has caused traders to largely give up on hopes that the Federal Reserve will deliver multiple cuts to interest rates this year. And that in turn has sent Treasury yields jumping in the bond market, which has cranked up the pressure on stocks.

Tuesday’s losses for stocks accelerated at the end of the day as traders made their final moves before closing the books on April, and ahead of an announcement by the Federal Reserve on interest rates scheduled for Wednesday afternoon.

No one expects the Federal Reserve to change its main interest rate at this meeting. But traders are anxious about what Fed Chair Jerome H. Powell may say about the rest of the year.

Traders are mostly betting the Fed will cut rates either once or not at all through 2024, according to data from CME Group. That’s a big letdown after traders came into the year forecasting six or more cuts.

The Fed itself was earlier penciling in three cuts, but top officials have recently hinted that rates may stay high for longer as they wait for more confirmation inflation is heading down toward their 2% target. The Fed’s main interest rate is sitting at the highest level since 2001, which puts downward pressure on the economy and investment prices.

Without the benefit of easing interest rates, companies will need to deliver bigger profits in order to support their stock prices, which critics have called broadly too expensive after their run to records.

GE Healthcare Technologies tumbled 14.3% after it reported weaker results and revenue for the latest quarter than analysts expected. F5 dropped 9.2% despite reporting a better profit than expected. It said customers were remaining cautious and forecasting largely flat IT budgets for the year.

McDonald’s slipped 0.2% after its profit for the latest quarter came up just shy of analysts’ expectations. It was hurt by weakening sales at its franchised stores overseas, in part by boycotts from Muslim-majority markets over the company’s perceived support of Israel.

Helping to keep the market’s losses in check was 3M, which rose 4.7% after reporting stronger results and revenue than forecast.

All told, the S&P 500 fell 80.48 points to 5,035.69. The Dow dropped 570.17 points to 37,815.92, and the Nasdaq composite fell 325.26 points to 15,657.82.

This earnings reporting season has largely been better than expected. Not only have the tech firms that dominate Wall Street done well, but so have companies across a range of industries.

In the bond market, the yield on the 10-year Treasury rose to 4.68% from 4.61% just before the morning release of the report on employee wages and benefits.

The two-year Treasury yield jumped to 5.03% from 4.97% late Monday.