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US health insurers drop after Medicare rates disappoint

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Tesla slides after Q1 deliveries miss

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Calvin Klein-parent PVH down after dour FY revenue

forecast

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Indexes down: Dow 1.19%, S&P 1.10%, Nasdaq 1.50%

(Updated at 10:15 a.m. ET/ 1415 GMT)

By Sruthi Shankar and Shashwat Chauhan

April 2 (Reuters) - U.S. stock indexes fell on Tuesday,

dragged down by megacap stocks and health insurers as investors

grew concerned about the possibility of fewer interest rate cuts

than expected from the Federal Reserve in the wake of strong

economic data.

Shares of rate-sensitive growth stocks including Nvidia ( NVDA )

, Microsoft ( MSFT ) and Amazon ( AMZN ) fell more than

1% each as the U.S. Treasury 10-year yield rose to

its highest since late November on Tuesday's data.

The data showed U.S. factory orders as well as job openings

beat expectations in February.

The Dow and S&P 500 closed lower on Monday

after stronger-than-expected manufacturing data from the

Institute for Supply Management (ISM) raised doubts over the

Fed's three interest rate cuts it had outlined at the last

policy meeting.

"We had that upside surprise with the ISM and now people are

getting a little bit worried about another strong number this

Friday in terms of jobs," said David Russell, global head of

market strategy at TradeStation.

Monthly non-farm payrolls data on Friday is likely to show

job additions slowed in March although average earnings ticked

higher compared to the previous month.

"The idea of three cuts this year... that's sort of what

people are concerned about this week," said Russell.

Traders are pricing in a near 57% chance of the Fed cutting

interest rates by at least 25 basis points in June, and see two

more cuts in 2024, as per CMEGroup's FedWatch tool.

The CBOE Volatility index, Wall Street's fear gauge,

touched a two-week high on Tuesday.

Investors will be looking for more clues in comments from a

host of Fed officials including New York Fed President John

Williams, Cleveland Fed President Loretta Mester and San

Francisco President Mary Daly, scheduled to speak later in the

day.

At 10:15 a.m. ET, the Dow Jones Industrial Average

was down 471.37 points, or 1.19%, at 39,095.48, the S&P 500

was down 57.57 points, or 1.10%, at 5,186.20, and the

Nasdaq Composite was down 245.44 points, or 1.50%, at

16,151.40.

The gloomy start to the new quarter comes on the heels of

the S&P 500's strongest first quarter in five years. The three

major indexes hit record highs last month, helped by optimism

around artificial intelligence and expectations of easing

monetary policy.

Shares of UnitedHealth ( UNH ), CVS Health ( CVS ) and

Humana fell between 6.2% and 13.5% on Tuesday as the

U.S. government kept reimbursement rates for providers of

Medicare Advantage health plans unchanged, in a setback to

insurers.

Tesla tumbled 4.9% after the automaker missed

market expectations for first-quarter deliveries.

Calvin Klein-parent PVH Corp's shares tumbled 21.9%

after the retailer forecast an about 11% drop in first-quarter

revenue. Peer Ralph Lauren lost 4.3%.

Cryptocurrency and blockchain-related stocks dropped,

tracking an over 6% fall in bitcoin. Exchange operator

Coinbase, bitcoin investor MicroStrategy ( MSTR ) and

crypto miner Riot Platforms ( RIOT ) fell between 4.2% and 7.9%.

Declining issues outnumbered advancers for a 3.48-to-1 ratio

on the NYSE and for a 3.90-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and 3 new lows,

while the Nasdaq recorded 27 new highs and 69 new lows.