- U.S. stocks fell sharply as investors became skeptical that the Federal Reserve would cut interest rates by June.
- The yield on the 10-year US Treasury note is at its highest level since November.
- Fed officials still believe three rate cuts are possible this year. Chairman Jerome Powell is scheduled to speak on Wednesday.
U.S. stocks fell for a third straight day on Tuesday as investors digested the possibility that the Federal Reserve's first interest rate cut might not come in June as expected.
Markets are once again betting on the Fed's monetary policy after a series of strong economic data suggests that conditions remain too tough to cut interest rates.
The probability of a turnaround in June fell below 50% at one point after Monday's better-than-expected manufacturing data. Meanwhile, the latest job numbers show that demand for labor remains high.
The 10-year Treasury yield hit its highest level since November, hitting a peak of 4.4%, as bond traders adjust to the prospect of fewer Fed rate cuts this year.
So far, San Francisco Fed President Mary Daly has said three rate cuts are still reasonable, and Cleveland's Loretta Mester agreed. Both officials would like to see further evidence of falling inflation.
Later this week, investors can expect Chairman Jerome Powell to speak on Wednesday, and the next jobs report is expected to be released on Friday.
Here are the U.S. indices as of Tuesday's close at 4 p.m.
Here's what else happened today:
In Commodities, Fixed Income and Cryptocurrencies:
- Crude oil prices rose. West Texas Intermediate crude oil rose $1.76 to $85.21 per barrel. Brent crude oil, the international benchmark, rose 1.93% to $88.93 per barrel.
- Gold rose 1% to $2,273.34 an ounce.
- The 10-year Treasury yield rose 3.4 basis points to 4.361%.
- Bitcoin fell 5.5% to $65,927.
