Wall Street Slips Monday

NEW YORK (AP) -- U.S. stocks are slipping Monday as Wall Street pushes out forecasts for when interest rates will start easing from the strictest levels in two decades.

The S&P 500 was 0.2% lower in early trading, coming off another all-time high and another winning week. The Dow Jones Industrial Average was down 143 points, or 0.4%, as of 9:40 a.m. Eastern time, and the Nasdaq composite was 0.1% lower.

Earnings season is near its midpoint, with roughly half the companies in the S&P 500 having reported their latest results, including most of the market's most influential. Estee Lauder jumped 14.5% after it reported better revenue and profit than analysts expected. McDonald's, meanwhile, fell 3.3% despite reporting stronger profit than expected. Its revenue for the latest quarter fell just short of forecasts.

Companies that have been missing analysts' estimates for earnings this reporting season have been seeing their stocks get punished even more than usual, according to strategists at Bank of America.

Stocks broadly felt some pressure from another rise for yields in the bond market. They rose as traders on Wall Street delayed their expectations for when the Federal Reserve will begin cutting its main interest rate.

The Fed has already yanked its federal funds rate to the highest level since 2001 in its efforts to bring down high inflation. High rates intentionally slow the economy by making borrowing more expensive and hurting investment prices.

Federal Reserve Chair Jerome Powell said again in an interview broadcast Sunday that the Fed may cut interest rates three times this year because inflation has been cooling. But he also indicated again in the interview on "60 Minutes" that the Fed is unlikely to begin in March, as many traders had earlier hoped.

Following the interview, traders pushed out some bets for the cuts to begin in June instead of May, according to data from CME Group.

The yield on the 10-year Treasury climbed to 4.12% from 4.09% late Friday and from less than 3.80% late last year.

At Goldman Sachs, economist David Mericle is still forecasting cuts to begin in May. Following Sunday's interview, though, he also sees a greater chance of rate cuts beginning later than that and happening in a steeper fashion.

Interest rates are one of the main levers that set prices for stocks. While that may be under pressure because a strong economy is forcing delays to expectations to rate cuts, the other lever may be getting a tailwind at the same time.

The economy has blasted through worries about an imminent recession, with the most recent evidence coming last week from a report showing U.S. employers hired many more workers last month than economists expected. That should help drive growth in profits for companies, which tend to drive stock price movements over the long term.

"On balance, the details of the report were largely positive and point towards continued momentum in the labor market and increased likelihood of a soft landing" for the economy, said Deutsche Bank senior U.S. economist Brett Ryan.

Elsewhere on Wall Street, Air Products and Chemicals slumped 15.2% after it reported profit and revenue that fell short of analysts' expectations. Caterpillar rose 4.5% after its profit for the latest quarter topped forecasts.

In stock markets abroad, Chinese indexes swung sharply following Beijing's latest pledge to shore up its financial markets.

Stocks sank 1% in Shanghai after coming off their worst week in five years. Chinese stocks have struggled on worries about a troubled real-estate industry and a disappointing overall economic recovery.