US stock market: Wall Street stocks close lower on higher Treasury yields, rate expectations

US stock market: Wall Street stocks ended lower in choppy trading on Tuesday as Treasury yields climbed, with investors weighing the likely path of interest rates in a resilient US economy with persistent inflation. Federal Reserve Chair Jerome Powell said on Tuesday recent inflation data has not given policymakers enough confidence to ease credit soon, noting that the US central bank may need to keep rates higher for longer than previously thought.

The Dow Jones Industrial Average got a boost from UnitedHealth Group's (UNH.N) better-than-expected quarterly results. Real estate and utilities were the biggest drags on the S&P 500, while technology gave the largest boost.

"People are trying to balance this two-sided narrative: US economic growth, which looks really good, and at the same time the inflation picture and interest rates, which will eventually be problematic for the equity market," said James St. Aubin, chief investment officer at Sierra Mutual Funds in California.

A report on Monday showed retail sales grew more than expected in March, a sign of US economic resilience that helped push benchmark US 10-year Treasury yields to five-month highs on Tuesday.

The Dow Jones Industrial Average (.DJI) rose 63.86 points, or 0.17 per cent, to 37,798.97, the S&P 500 (.SPX) lost 10.41 points, or 0.21 per cent, to 5,051.41 and the Nasdaq Composite (.IXIC) lost 19.77 points, or 0.12 per cent, to 15,865.25.

The S&P 500 and the Nasdaq are nearly 4 per cent off from record high levels reached last month. Shares of Morgan Stanley (MS.N) rose 2.5 per cent after its first-quarter profit beat estimates on resurging income from investment banking.

Bank of America (BAC.N) dropped 3.5 per cent after the lender posted lower first-quarter profits as its loan loss provisions grew. Johnson & Johnson (JNJ.N) slipped 2.1 per cent as the drugmaker's revenue missed analysts' estimates after sales from its blockbuster psoriasis drug, Stelara, fell short of expectations.

Tesla (TSLA.O) slipped 2.7 per cent a day after falling over 5 per cent on news that the EV marker plans to lay off more than 10 per cent of its global workforce.

Declining issues outnumbered advancers by a 2.25-to-1 ratio on the NYSE, which had 23 new highs and 175 new lows. On the Nasdaq, 1,451 stocks rose and 2,764 fell as declining issues outnumbered advancers by a 1.9-to-1 ratio.

The S&P 500 posted one new 52-week high and eight new lows while the Nasdaq recorded 30 new highs and 362 new lows. Volume on US exchanges was 11.48 billion shares, compared with the 11.05 billion average for the last 20 days.