Wall St drops as bond yields rise; Maccas, Coke slip

Wall Street's main indexes moved lower, as worries of a less dovish Federal Reserve lifted Treasury yields, while losses in McDonald's and Coca-Cola also weighed on investors' minds.

US Treasury yields were trading at three-month highs on Wednesday, pressuring stocks as markets reassess the size of interest-rate cuts over the next several months against the backdrop of strong economic data.

"When you get a 10-year Treasury at a four and a quarter, it pushes back on the rally in the stock market. Things start to slow down... and people get a little bit nervous," said Robert Pavlik, senior portfolio manager at Dakota Wealth.

The market's recent rally also contributed to the pullback on the day, Pavlik said.

Rate-sensitive growth stocks were hit, with Nvidia down 1.8 per cent and Apple off 0.5 per cent, pulling Information Technology stocks 0.6 per cent lower.

Tesla will be the first of the so-called Magnificent Seven companies to report results after market close. Its shares slipped 0.1 per cent.

Among the major indexes, the blue-chip Dow underperformed, weighed down by McDonald's. The fast-food chain slumped 6.1 per cent after an E. coli infection linked to its Quarter Pounder hamburgers killed one and sickened many.

The broader Consumer Discretionary sector was off 0.7 per cent.

Coca-Cola dipped 2.7 per cent after the company reiterated its annual profit growth forecast despite expecting higher revenue. Boeing was up 0.6 per cent in choppy trading even after reporting a quarterly loss of $6 billion owing to a crippling strike.

Factory workers at the troubled planemaker will vote later in the day on a new contract proposal that could end the more than five-week-long standoff.

The Dow Jones Industrial Average fell 246.59 points, or 0.57 per cent, to 42,678.30, the S&P 500 lost 20.11 points, or 0.34 per cent, to 5,831.09 and the Nasdaq Composite lost 87.92 points, or 0.47 per cent, to 18,485.21.

US markets are near record high levels, but a combination of earnings, a changing monetary policy outlook and the upcoming presidential election will test the sustainability of the recent rally and could lead to some market volatility.

Investors are also focused on the rising chances of a second Donald Trump administration. If he wins, Trump's policies for spending and tariff implementation are expected to raise the US fiscal deficit as well as inflation.

Of the roughly 24 per cent of S&P 500 companies that have reported so far, 83 per cent exceeded earnings estimates, according to LSEG data.

The Fed's Beige Book and commentary from Fed official Thomas Barkin are on the radar on the day.

Meanwhile, Starbucks was down marginally after the company suspended its annual forecast on Tuesday and reported revenue and profit declines in preliminary fourth-quarter results.

Semiconductor company Texas Instruments gained four per cent after its third-quarter profit beat forecasts, while telecom firm AT&T rose one per cent after gaining more wireless subscribers than expected in the third quarter.

Qualcomm was down 2.7 per cent after a report said Arm Holdings is cancelling Qualcomm's licence to use intellectual property to design chips.

Declining issues outnumbered advancers by a 2.28-to-1 ratio on the NYSE, and by a 2.04-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and no new lows, while the Nasdaq Composite recorded 28 new highs and 27 new lows.