Stock market today: Most of Wall Street slips as expectations rise for rates to stay high

NEW YORK (AP) — 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.

Philip Jefferson said his expectation is for inflation to keep easing and for the Fed to hold its main rate “steady at its current level.” That contrasted with his remarks in February, when he said “it will likely be appropriate to begin dialing back policy restraint at some point this year” if things went as he expected.

The yield on the two-year Treasury, which tracks expectations for Fed action, shot as high as 5% immediately after Powell spoke and got back to where it was in November.

But yields later pared their gains as the afternoon progressed, and the two-year yield drifted back to 4.98%. That's still up from 4.91% late Monday.

Traders are mostly betting on the Fed delivering just one or two cuts to interest rates this year after coming into 2024 expecting six or more. They're now also betting on a 12.5% probability that no cuts are coming, up from just 1.2% a month ago, according to data from CME Group.

The threat of rates staying high for longer hit real-estate investment trusts and utility stocks particularly hard. They pay relatively high dividends and tend to attract the same kind of investors as bonds do. When bonds are paying higher yields, income-seeking investors may camp there instead.

Real-estate stocks fell 1.5% for the largest loss among the 11 sectors that make up the S&P 500. Utilities weren't far behind with a loss of 1.4%.

High rates can also translate into more expensive mortgages, and stocks of homebuilders slumped after a report showed they broadly broke ground on fewer sites last month than economists expected. Lennar fell 2.3%, and D.R. Horton sank 2%.

Northern Trust slumped 5% after the financial services company reported weaker earnings for the start of the year than analysts expected. Johnson & Johnson sank 2.1% despite topping profit forecasts. Its revenue came in a whisper below expectations.

Companies are under even more pressure than usual to report fatter profits and revenue because the other lever that sets stock prices, interest rates, looks unlikely to add much lift soon.

The stock of Donald Trump's social-media company also slumped again. Trump Media & Technology Group fell another 14.2% to follow up on its 18.3% slide from Monday.

The company said it's rolling out a service to stream live TV on its Truth Social app, including news networks and “other content that has been cancelled, is at risk of cancellation, or is being suppressed on other platforms and services.”

The stock has dropped below $23 after nearing $80 last month as euphoria fades around the stock and the company made moves to clear the way for some investors to sell shares.

In markets abroad, stock indexes tumbled across Asia and Europe as they caught up with the drubbing Wall Street took on Monday. Stock indexes fell 2.1% in Hong Kong, 2.3% in Seoul and 1.8% in London.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

The New York Stock Exchange is seen, through a window guard, on Tuesday, April 16, 2024 in New York. Wall Street drifted toward gains as more corporate earnings come in, giving investors a break from fretting about if and when the Federal Reserve might cut interest rates. (AP Photo/Peter Morgan)

The front of the New York Stock Exchange is shown on Thursday, April 11, 2024 in New York. (AP Photo/Peter Morgan)

People walk near an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

A person looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

Currency traders work near the screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, April 16, 2024. Asian shares skidded Tuesday following a slump on Wall Street after higher yields in the U.S. bond market cranked up pressure on stocks. (AP Photo/Ahn Young-joon)

Currency traders work near the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, April 16, 2024. Asian shares skidded Tuesday following a slump on Wall Street after higher yields in the U.S. bond market cranked up pressure on stocks. (AP Photo/Ahn Young-joon)

Currency traders work near the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, April 16, 2024. (AP Photo/Ahn Young-joon)

A person strolls with a dog in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei and New York Dow indexes at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

A person looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

A person looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

KYIV, Ukraine (AP) — NATO countries haven’t delivered what they promised to Ukraine in time, the alliance’s chief said Monday, allowing Russia to press its advantage while Kyiv’s depleted forces wait for military supplies to arrive from the U.S. and Europe.

"Serious delays in support have meant serious consequences on the battlefield” for Ukraine, NATO Secretary-General Jens Stoltenberg told a news conference in Kyiv with President Volodymyr Zelenskyy.

Outgunned, Ukraine’s troops have struggled to fend off Russian advances on the battlefield. They were recently compelled to make a tactical retreat from three villages in the east, where the Kremlin's forces have been making incremental gains, Ukraine's army chief said Sunday. The Russian Defense Ministry claimed Monday its forces had also taken the village of Semenivka.

“The lack of ammunition has allowed the Russians to push forward along the front line. Lack of air defense has made it possible for more Russian missiles to hit their targets, and the lack of deep strike capabilities has made it possible for the Russians to concentrate more forces,” Stoltenberg said.

Kyiv’s Western partners have repeatedly vowed to stand with Ukraine “for as long as it takes.” But vital U.S. military help was held up for six months by political differences in Washington, and Europe’s military hardware production has not kept up with demand. Ukraine’s own manufacturing of heavy weapons is only now starting to gain traction.

Now, Ukraine and its Western partners are racing to deploy critical new military aid that can help check the slow and costly but steady Russian advance across eastern areas, as well as thwart drone and missile attacks.

Zelenskyy said new Western supplies have started arriving, but slowly. "This process must be speeded up,” he said at the news conference with Stoltenberg.

Though the 1,000-kilometer (600-mile) front line has shifted little since early in the war, the Kremlin’s forces in recent weeks have edged forward, especially in the Donetsk region, with sheer numbers and massive firepower used to bludgeon defensive positions.

Russia also continues to launch missiles, drones and bombs at cities across Ukraine. At least four people were killed and 27 injured in a Russian missile strike on residential buildings and “civil infrastructure” in the southern Ukrainian port city of Odesa on Monday, regional governor Oleh Kiper said on the Telegram messaging site.

A turreted Gothic-style building known locally as the “Harry Potter Castle,” was seen in flames after the strike.

Russia is a far bigger country than Ukraine, with greater resources. It has also received weapons support from Iran and North Korea, the U.S. government says.

Drawn-out Ukrainian efforts to mobilize more troops, and the belated building of battlefield fortifications, are other factors undermining Ukraine’s war effort, military analysts say.

Nick Reynolds, a research fellow for land warfare at the London-based Royal United Services Institute, said the war “is still largely an artillery duel.”

He said he did not expect to see major movement of the front lines in the near term, but that “the conditions are being set for which side has military advantage at the front line. The Russian military is in a better position at the moment.

“When we see one side or the other being in a position to move the front line, at some stage, maneuver will be restored to the battlefield. Not in the next few weeks, maybe not even in the next few months. But it will happen,” he told The Associated Press.

Pentagon spokesperson Sabrina Singh, at a briefing with reporters Monday, also acknowledged Russia’s recent battlefield gains, noting that a delay in congressional approval for additional spending “set the Ukrainians back.”

NATO chief Stoltenberg, however, said more weapons and ammunition for Ukraine are on the way, including Patriot missile systems to defend against heavy Russian barrages that smash into the power grid and urban areas.

Ukrainian officials say Russia is assembling forces for a major summer offensive, even if its troops are making only incremental gains at the moment.

“Russian forces remain unlikely to achieve a deeper operationally significant penetration in the area in the near term,” the Institute for the Study of War said in an assessment Sunday.

Even so, the Kremlin’s forces are closing in on the strategically important hilltop town of Chasiv Yar, whose capture would be an important step forward into the Donetsk region.

Donetsk and Luhansk form much of the industrial Donbas region, which has been gripped by separatist fighting since 2014, and which Putin has set as a primary objective of the Russian invasion. Russia illegally annexed areas of Donetsk, Kherson, Luhansk, and Zaporizhzhia regions in September 2022.

In other developments, Sophie, the Duchess of Edinburgh made an unannounced visit to Ukraine – the first British royal to travel to the country since Russia’s 2022 invasion.

Buckingham Palace said Monday that Sophie, wife of Prince Edward, met President Volodymyr Zelenskyy and First Lady Olena Zelenska in Kyiv and delivered a message on behalf of King Charles III. It did not disclose the timing or details of the visit.

The palace said Sophie, 59, made the trip “to demonstrate solidarity with the women, men and children impacted by the war and in a continuation of her work to champion survivors of conflict-related sexual violence.”

Associated Press writer Tara Copp in Washington contributed reporting.

Follow AP’s coverage of the war in Ukraine at https://apnews.com/hub/russia-ukraine

Ukrainian President Volodymyr Zelenskyy, right, welcomes NATO Secretary General Jens Stoltenberg during their meeting in Kyiv, Ukraine, Monday, April 29, 2024. (Ukrainian Presidential Press Office via AP)

Ukrainian President Volodymyr Zelenskyy, left, welcomes NATO Secretary General Jens Stoltenberg during their meeting in Kyiv, Ukraine, Monday, April 29, 2024. (Ukrainian Presidential Press Office via AP)

Ukrainian President Volodymyr Zelenskyy, center right, talks with NATO Secretary General Jens Stoltenberg, centre left, during their meeting in Kyiv Ukraine, Monday, April 29, 2024. (Ukrainian Presidential Press Office via AP)

Ukrainian President Volodymyr Zelenskyy, right, welcomes NATO Secretary General Jens Stoltenberg during their meeting in Kyiv, Ukraine, Monday, April 29, 2024. (Ukrainian Presidential Press Office via AP)

Two women walk along a street in downtown Kyiv, Ukraine, Sunday, April 28, 2024. (AP Photo/Francisco Seco)

A woman sells toys in front of a building with windows protected by sandbags in Kyiv, Ukraine, Sunday, April 28, 2024. (AP Photo/Francisco Seco)

NATO Secretary General Jens Stoltenberg talks during his joint press conference with Ukrainian President Volodymyr Zelenskyy in Kyiv, Ukraine, Monday, April 29, 2024. (AP Photo/Efrem Lukatsky)

Ukrainian President Volodymyr Zelenskyy, right, welcomes NATO Secretary General Jens Stoltenberg during their meeting in Kyiv, Ukraine, Monday, April 29, 2024. (AP Photo/Efrem Lukatsky)

Ukrainian President Volodymyr Zelenskyy, right, talks with NATO Secretary General Jens Stoltenberg during their meeting in Kyiv Ukraine, Monday, April 29, 2024. (Ukrainian Presidential Press Office via AP)

NATO Secretary General Jens Stoltenberg talks during his meeting with Ukrainian President Volodymyr Zelenskyy in Kyiv Ukraine, Monday, April 29, 2024. (Ukrainian Presidential Press Office via AP)

Ukrainian President Volodymyr Zelenskyy, left, welcomes NATO Secretary General Jens Stoltenberg walk before their press conference in Kyiv Ukraine, Monday, April 29, 2024. (AP Photo/Efrem Lukatsky)