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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 0.79%, S&P 0.66%, Nasdaq 0.77%

(Updated at 11:16 a.m. ET/ 1516 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.

The data comes ahead of the Federal Reserve Open Market

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

interest rate verdict and Chair Jerome Powell's remarks at the

end of the event in focus.

"The real problem for the Fed is that it could take some

time for changes in labor costs to impact consumer pricing and

markets are getting increasingly frustrated with the Fed's

decision-making process," said Jeffrey Roach, chief economist

for LPL Financial.

Money markets are largely expecting the U.S. central bank to

stand pat on interest rates on Wednesday, while pricing in just

about 31 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 11.2%

after the medical equipment firm missed estimates for

first-quarter revenue, while U.S. industrial conglomerate 3M ( MMM )

gained 4.6% after posting a better-than-expected

quarterly profit.

Eli Lilly ( LLY ) jumped 5% after the drugmaker raised its

full-year profit forecast.

PayPal ( PYPL ) rose 3.1% after the payments giant raised

its full-year adjusted profit forecast.

Of the 265 companies in the S&P 500 that have reported

earnings to date for the first quarter, 79.2% have beat analyst

estimates, compared with the long-term average of 67%, according

to LSEG I/B/E/S data.

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, U.S. consumer confidence deteriorated in April,

falling to its lowest level in more than 1-1/2 years.

At 11:16 a.m. ET, the Dow Jones Industrial Average

was down 301.98 points, or 0.79%, at 38,084.11, the S&P 500

was down 33.84 points, or 0.66%, at 5,082.33, and the

Nasdaq Composite was down 123.25 points, or 0.77%, at

15,859.83.

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

rate-sensitive sectors such as utilities and real

estate among the worst hit. Energy led losses

with a 1.4% fall.

Tesla dipped 5.2% 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.

Declining issues outnumbered advancers by a 4.07-to-1 ratio

on the NYSE and by a 2.35-to-1 ratio on the Nasdaq.

The S&P index recorded 17 new 52-week highs and five new

lows, while the Nasdaq recorded 32 new highs and 76 new lows.