WALL STREET

to justify their prices.

Several had been leading the recent decline for the broader market, which saw the S&P 500 fall as much as 5.5% in April. “This underscores the importance of earnings in the next two weeks, which will be dominated by the Mag7, and the risk that disappointing results may accelerate the sell-off,” according to

Barclays strategists led by Stefano Pascale and Anshul Gupta.

With skeptics still calling the broad stock market too expensive, criticism would ease only if companies were to produce higher profits or if interest rates were to fall. The latter has been looking less likely.

Top officials at the Federal Reserve warned last week they may need to keep interest rates high for a while in order to ensure inflation is heading down to

their 2% target. That was a big letdown for financial markets, dousing hopes that had built after the Fed signaled earlier that three interest-rate cuts may come this year.

Lower rates had appeared to be on the horizon after inflation cooled sharply last year. But a string of reports this year showing inflation has remained hotter than expected has raised worries about stalled progress.

That’s why Tuesday’s report

suggesting a slowdown in growth for overall business activity across the country was so welcomed. It could keep the door open for the Fed to cut interest rates the one or two times that many traders are currently forecasting.

The yield on the 10-year Treasury fell to 4.59% to relieve the pressure on stocks broadly, particularly high-growth ones and those that pay high dividends. The 10-year yield had been at

4.64% just before the report’s release and at 4.61% late Monday.

The two-year Treasury yield, which moves more on expectations for Fed action, had a similar drop. It fell to 4.92% from 4.97% late Monday.

In stock markets abroad, indexes rose across much of Europe. They were mixed earlier in Asia. Stocks jumped 1.9% in Hong Kong but fell 0.7% in Shanghai.