NEW YORK (AP) — U.S. stocks closed out their ugly April with even more losses, cementing the market’s worst month since September. The S&P 500 fell 1.6% Tuesday to pull it further from its record set at the end of March. The Dow Jones Industrial Average dropped 1.5%, and the Nasdaq composite sank 2%. Treasury yields rose again to up the pressure on stocks after a report showed workers won bigger gains in pay and benefits during the start of the year than expected. Such hotter-than-expected data has diminished traders’ expectations for how many times the Federal Reserve may cut interest rates this year.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — More worries about inflation and interest rates staying high are knocking U.S. stocks lower on Tuesday, as the market closes out its worst month since September.

The S&P 500 was down 1% in late trading and on track to close out its first losing month in the last six. Its momentum slammed into reverse in April, falling as much as 5.5% at one point, after setting records through the early part of the year.

The Dow Jones Industrial Average was down 430 points, or 1.1%, as of 3 p.m. Eastern time, and the Nasdaq composite was 1.3% lower.

Stocks began dropping as soon as trading began, after a report showed U.S. workers won bigger gains in wages and benefits than expected during the first three months of the year. While that’s good news for workers and the latest signal of a solid job market, it feeds into worries that upward pressure remains on the economy and inflation.

It’s the latest in a string of reports on inflation and the overall economy to come in stubbornly higher than forecast. That’s pushed traders to largely give up on hopes that the Federal Reserve will deliver multiple cuts to interest rates this year. That in turn has sent Treasury yields jumping in the bond market, which has cranked up the pressure on stocks.

Tuesday’s losses accelerated in the afternoon as traders made their final moves before closing the books on April, and ahead of Wednesday’s afternoon announcement by the Federal Reserve on interest rates.

No one expects the Federal Reserve to change its main interest rate on Wednesday. But traders are now mostly betting the Fed will cut rates either one or zero times through the balance of this year, according to data from CME Group. That’s a big letdown after traders came into the year forecasting six or more cuts.

The Fed itself was earlier penciling in three cuts to rates during 2024, but top officials have recently hinted rates may stay high for longer as they wait for more confirmation inflation is heading down toward their 2% target. The Fed’s main interest rate is sitting at the highest level since 2001, which puts downward pressure on the economy and investment prices.

Without the benefit of easing interest rates, companies will need to deliver bigger profits in order to support their stock prices, which critics have called too expensive following their run to records.

GE Healthcare Technologies tumbled 13.1% after it reported weaker results and revenue for the latest quarter than analysts expected. F5 dropped 7.8% despite reporting a better profit than expected. Its revenue fell short of forecasts, and it said customers were remaining cautious and forecasting largely flat IT budgets for the year.

McDonald’s erased an early loss and was up 0.1% after its profit for the latest quarter came up just shy of analysts’ expectations. It was hurt by weakening sales trends at its franchised stores overseas, in part by boycotts from Muslim-majority markets over the company’s perceived support of Israel.

Helping to keep the market’s losses in check was 3M, which rose 5.3% after reporting stronger results and revenue than forecast. Eli Lilly climbed 5.2% after turning in a stronger profit than expected on strong sales of its Mounjaro and Zepbound drugs for diabetes and obesity. It also raised its forecasts for revenue and profit for the full year.

This earnings reporting season has largely been better than expected so far. Not only have the tech companies that dominate Wall Street done well, so have smaller companies across a range of industries.

That’s a change from the recent past, and it helped push strategists at Deutsche Bank to raise their forecast for full-year earnings growth for the S&P 500. Many companies are topping forecasts because they’ve been able to wring more profit out of each $1 of revenue than analysts were expecting, according to Binky Chadha, chief strategist at Deutsche Bank.

Such strength could support stock prices even if interest rates end up staying high, according to Kristy Akullian, head of iShares Investment Strategy, Americas.

“Equities don’t need Fed rate cuts for the rally to continue, all they need is solid earnings growth,” she said.

In the bond market, the yield on the 10-year Treasury rose to 4.68% from 4.61% just before the report’s release.

The two-year Treasury yield, which more closely tracks expectations for the Fed, jumped back above the 5% level to 5.03% from 4.97% late Monday.

In stock markets abroad, Japan’s Nikkei 225 rose 1.2% after reopening following a holiday. The government reported stronger-than-expected gains in industrial production for March.

Indexes were mixed across much of the rest of Asia, but lower in Europe.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.