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Eli Lilly ( LLY ) jumps after raising annual profit forecast

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McDonald's down after rare profit miss

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Indexes down: Dow 0.57%, S&P 0.13%, Nasdaq 0.07%

(Updated at 10:01 a.m. ET/ 1401 GMT)

By Shristi Achar A and Shashwat Chauhan

April 30 (Reuters) -

Wall Street's main indexes fell on Tuesday with caution

prevailing ahead of the Federal Reserve's interest-rate decision

and as stronger-than-expected labor costs hinted at persistent

inflation.

U.S. labor costs increased in the first quarter amid a rise

in wages and benefits, confirming the surge in inflation early

in the year that will likely delay a much-anticipated interest

rate cut later in 2024.

"This pretty much tells you that the Fed is going to be very

reluctant to reduce short-term interest rates in 2024 and that's

had the predictable impact on the stock market," said Hugh

Johnson, chief economist at Hugh Johnson Economics.

"It doesn't really take interest rate reductions off the

table, but it does mean that this number is certainly not going

to help."

The data comes ahead of the Federal Reserve Open Market

Committee's (FOMC) two-day meeting later in the day, with

markets focused on the interest rate verdict and Chair Jerome

Powell's remarks.

Money markets are largely expecting the U.S. central

bank to stand pat on interest rates on Wednesday, while pricing

in just about 30 basis points (bps) of rate cuts this year, down

from about 150 bps estimated at the start of 2024, according to

LSEG data.

On the earnings front, GE HealthCare ( GEHC ) lost 9.6%

after the medical equipment firm missed estimates for

first-quarter revenue, while McDonald's fell 0.9% as it

missed profit estimates for the first time in two years.

U.S. industrial conglomerate 3M ( MMM ) gained 3.8% after

posting a better-than-expected quarterly profit, while Eli Lilly ( LLY )

added 7.6% after the drugmaker raised its full-year

profit forecast.

PayPal ( PYPL ) rose 2% after the payments giant raised its

full-year adjusted profit forecast.

U.S. equities have had a rough April as elevated inflation

numbers sharply pulled back bets on interest rate cuts, while

heightened tensions in the Middle East and earnings updates also

added to the volatility.

All three U.S. stock indexes are poised to record their

first monthly loss in six.

Meanwhile, a gauge of U.S. consumer confidence came in at 97

in April, against expectations of 104.

At 10:01 a.m. ET, the Dow Jones Industrial Average

was down 216.96 points, or 0.57%, at 38,169.13, the S&P

500 was down 6.86 points, or 0.13%, at 5,109.31, and the

Nasdaq Composite was down 11.93 points, or 0.07%, at

15,971.15.

Nine of the 11 S&P 500 sectors were trading lower, with

rate-sensitive sectors such as utilities and real

estate among the worst hit.

Tesla dipped 2.7% following a 15% surge in the

previous session after a report that CEO Elon Musk had dismissed

two senior executives and plans to lay off hundreds more

employees.

Globe Life ( GL ) shed 2.7% after short-seller Viceroy

Research revealed a short position against the insurer.

Declining issues outnumbered advancers for a 3.41-to-1 ratio

on the NYSE and for a 2.04-to-1 ratio on the Nasdaq.

The S&P index recorded 15 new 52-week highs and five new

lows, while the Nasdaq recorded 23 new highs and 58 new lows.