US stocks ended their worst month of the year on another low note.
The S&P 500 fell 1.6% on Tuesday. The Nasdaq Composite lost 2%, while the Dow Jones Industrial Average shed 570 points, or 1.5%.
All 11 S&P 500 sectors finished the day in the red. The broad index fell 4.2% in April, its worst performance since September, after posting its best first-quarter performance since 2019. The Nasdaq and Dow dropped 4.4% and 5%, respectively, for the month.
The Federal Reserve's campaign to lower inflation still has a way to go, fresh data on worker compensation suggested Tuesday. The Labor Department's employment-cost index rose by a seasonally adjusted 1.2% in the first quarter from the previous three months, and 4.2% from a year earlier.
"The market is obviously not taking the wage pressure well," said John Lynch, chief investment officer at Comerica Wealth Management. The data, he said, "completely gets the inflation discussion back on the table."
It was the latest piece of data suggesting that inflation is still running hotter than the central bank would prefer. Consumer prices have increased more than Wall Street had expected for three months in a row.
That trend has dimmed Wall Street's hopes for interest-rate cuts in the near future. Investors entered the year expecting as many as six cuts in 2024, and now many doubt there will be any cuts at all.
Fed officials are expected to hold their benchmark federal-funds rate steady at its highest level in more than two decades at its policy meeting, which concludes Wednesday. On Friday, April jobs data will offer a fresh look at the state of the labor market.
The benchmark 10-year Treasury yield settled at 4.683% Tuesday, up from 4.612% Monday and 4.192% on March 28. It was the largest monthly increase in yields since September 2022. Bond prices fall when yields rise.
Earnings season has been a relatively bright spot amid the recent gloom. S&P 500 companies are growing first-quarter earnings by 3.9%, according to FactSet, when blending actual results with analysts forecasts. About 53% of companies within the index had reported results as of Tuesday morning.
Amazon.com, the latest of the Magnificent Seven tech stocks to report, announced profits that topped expectations after markets closed Tuesday. Apple's results are due Thursday afternoon.
"I would say across the board that earnings season has been good enough to support and justify where we are," said Nicole Webb, senior vice president and financial advisor at Wealth Enhancement Group.
Eli Lilly rose 6% after the maker of popular weight-loss drugs increased its full-year profit outlook. 3M rose 4.7% after announcing it would scrap its quarterly dividend.
GE HealthCare Technologies fell 14% after earnings, its worst single-day performance since its 2022 stock-market debut.