By Caroline Valetkevitch
NEW YORK (Reuters) -U.S. stocks fell on Tuesday as investors weighed chances that the Federal Reserve could delay cutting interest rates, while Tesla (NASDAQ:) shares dropped after the electric car maker posted fewer quarterly deliveries for the first time in nearly four years.
Tesla’s stock fell more than 5% and was among the biggest drags on the and Nasdaq.
Adding to caution, U.S. Treasury 10-year yields rose to their highest since late November.
“The narrative of ‘higher for longer’ is coming back into play despite the fact that the Fed does see a rate cut sometime this year. So this has got the market worried,” said Quincy Krosby, chief global strategist at LPL Financial (NASDAQ:) in Charlotte, North Carolina.
Recent solid U.S. economic reports have raised doubts about whether the Fed could deliver the three rate cuts outlined in its latest forecast.
Data on Tuesday showed new orders for U.S.-manufactured goods rebounded more than expected in February, while U.S. job openings held steady at higher levels.
The fell 437.15 points, or 1.1%, to 39,129.7. The S&P 500 lost 46.03 points, or 0.88%, at 5,197.74 and the dropped 190.95 points, or 1.16%, to 16,205.89.
Healthcare shares were among the day’s weakest performers. UnitedHealth (NYSE:), CVS Health (NYSE:) and Humana (NYSE:) fell as the U.S. government kept reimbursement rates for providers of Medicare Advantage health plans unchanged, in a setback for insurers.
The , Wall Street’s fear gauge, touched an over two-week high.
Traders are pricing in a near 57% chance of the Fed cutting interest rates by at least 25 basis points in June, down from 64% just a week ago, as per CMEGroup’s FedWatch tool.
Investors are eagerly awaiting Friday’s U.S. non-farm payrolls data. Also, several Fed officials are due to speak this week.
Among decliners, Calvin Klein-parent PVH Corp (NYSE:)’s shares tumbled after the retailer forecast a roughly 11% drop in first-quarter revenue.
Declining issues outnumbered advancers on the NYSE by a 3.50-to-1 ratio; on Nasdaq, a 3.08-to-1 ratio favored decliners.
The S&P 500 posted 22 new 52-week highs and four new lows; the Nasdaq Composite recorded 43 new highs and 113 new lows.