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Amazon ( AMZN ) set to report results after the bell

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Eli Lilly ( LLY ) jumps after raising annual profit forecast

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McDonald's gains despite rare profit miss

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Indexes down: Dow 0.95%, S&P 0.82%, Nasdaq 1.04%

(Updates to 2:16 PM ET)

By Chibuike Oguh

NEW YORK, April 30 (Reuters) - U.S. stocks traded lower

on Tuesday as markets weighed economic data showing rising labor

costs and deteriorating consumer confidence on the eve of a key

Federal Reserve policy meeting to decide the direction of

interest rates.

Data showed on Tuesday that U.S. labor costs rose by a

more-than-expected 1.2% last quarter, indicating an uptick in

wage pressures. A survey also found that U.S. consumer

confidence worsened in April, dropping to its lowest level in

more than 1-1/2 years.

The reports came a day before the Federal Reserve Open

Market Committee (FOMC) begins its two-day meeting, with

investors widely expecting the central bank to leave interest

rates unchanged.

Ten out of the 11 S&P 500 sectors were trading lower, led by

stocks in energy, consumer discretionary, materials, industrials

and technology sectors. Equities in utilities and healthcare

sectors were making gains after paring early session losses.

Most Magnificent Seven stocks were also declining. Tesla

down 5%, Alphabet fell 1.1%, Nvidia ( NVDA )

shed 1%, Microsoft ( MSFT ) lost 1.6%, and Amazon ( AMZN )

dropped 0.6%.

"We're still in an environment where the knee-jerk reaction

is to extrapolate any warmer data into firmer inflation and more

hawkish reaction from the Fed," said Garrett Melson, portfolio

strategist at Natixis Investment Managers in Boston.

"But nothing has changed: growth is still strong, labor

markets are holding up, and ultimately we're taking a little bit

of breather in the disinflation process," Melson added.

Money markets are 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.

At 02:16 p.m. the Dow Jones Industrial Average

fell 365.34 points, or 0.95%, to 38,020.75, the S&P 500

lost 41.94 points, or 0.82%, to 5,074.23 and the Nasdaq

Composite lost 165.79 points, or 1.04%, to 15,817.29.

Shares of GE HealthCare ( GEHC ) shrank 13.3% after its

first-quarter revenue missed analyst estimates, 3M ( MMM )

gained 3.3% after posting a better-than-expected quarterly

profit.

Drugmaker Eli Lilly jumped 6% after it raised its

full-year profit forecast. PayPal ( PYPL ) rose 2% after raising

its full-year adjusted profit forecast.

McDonald's rebounded from early losses and was up

0.1% after it missed quarterly profit estimates for the first

time in two years.

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.

Declining issues outnumbered advancers by a 3.76-to-1 ratio

on the NYSE. On the Nasdaq, 1,225 stocks rose and 2,880 fell as

declining issues outnumbered advancers by a 2.35-to-1 ratio.

The S&P 500 posted 18 new 52-week highs and 6 new lows while

the Nasdaq recorded 45 new highs and 99 new lows.