Dow loses nearly 500 points

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The Dow Jones Industrial Average
fell for a second day, continuing Wall Street’s lackluster start to the quarter, as bond yields increased and traders lowered expectations that the Federal Reserve would cut interest rates in June.

The 30-stock Dow dropped 474 points, or 1.2%. At its session low, the benchmark was down more than 500 points. The S&P 500
slid 1%, and the Nasdaq Composite
shed 1.4%.

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The second quarter for stocks is off to a rough start as sticky inflation data to end last week and some strong economic data Monday sends yields higher and reduces odds the Fed will cut rates in June. The rate on the 10-year Treasury yield to jump to its highest level since Nov. 28, while oil prices also hit a five-month high on Tuesday, are adding to inflationary pressures.

“What we’re seeing is a one-two punch with the combination of continued hot inflation data with profit taking,” said Greg Bassuk, CEO of AXS Investments. With “very significant Q1 market gains … we’re due for a little correction. But we think that really the investor narrative also continues to be higher for longer with respect to interest rates.”

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