US stocks drop as bond yields jump after Fed official sees slower pace of rate cuts

• Stocks fell and bond yields jumped after the Fed's Christopher Waller cited a slow Fed pivot.
• "I believe it can and should be lowered methodically and carefully," he said in a speech.
• Strong bank earnings helped lifted up Goldman Sachs shares, while Boeing and Apple slid.

Stocks fell Tuesday as investors readjusted their expectations of imminent interest rate cuts following comments from a key central bank official. 

The 10-year Treasury yield returned to 4% levels, as Federal Reserve Governor Christopher Waller outlined that the central bank would likely cut rates at a slower pace than markets are anticipating. 

"When the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully," he said in a speech at the Brookings Institution.

The 10-year Treasury yield jumped 10 basis points Tuesday to 4.058%. 

His remarks followed similar caution from other central bankers, with officials speaking at the World Economic Forum in Davos, Switzerland. Market expectations of a rate cut in March have since climbed lower, with futures now indicating a 65%.

Fed policy may be further informed by Wednesday's retail sales data, and signal whether consumer spending strength continues to hold up.

Among individual equities, strong bank earnings lifted up Goldman Sachs. Meanwhile, Boeing continued to tumble since the grounding of its Max 757, while Apple's share price after the Supreme Court ruled against it on app store policy.

Here's where US indexes stood at the 4:00 p.m. closing bell on Tuesday: 

• S&P 500: 4,765.98, down 0.37%
• Dow Jones Industrial Average: 37,361.12, down 0.62% (-231.86 points)
• Nasdaq Composite: 14,944.35, down 0.19% 

Here's what else is going on:

• Boeing's market value has plummeted $28 billion since the MAX 757's panel blew out.
• Stocks are looking more and more like the 2020 bull market, NDR says.
• Homeowners look less deterred by mortgage rates, and could mean a wave of home listings, Zillow reports.
• Don't expect a soft landing and six rate cuts, Harvard's Kenneth Rogoff says. 
• No 'tsunami of defaults' is coming as corporations have extended debt maturities, Bernstein says.

In commodities, bonds, and crypto: 

• Oil prices dropped. West Texas Intermediate slumped 1.2% to $71.80 a barrel. Brent crude, the international benchmark, fell 0.55% to $78.12 a barrel.
• Gold slid about 1% to $2,031 per ounce.
• The 10-year Treasury yield climbed 10 basis points to 4.058%.
• Bitcoin jumped 1.77% to $43,141.