The S&P 500 slipped on Tuesday after Federal Reserve Chair Jerome Powell said interest rates may need to stay elevated.
The broad index lost 0.21% to finish at 5,051.41, while the Nasdaq Composite shed 0.12% to 15,865.25. The Dow Jones Industrial Average rose 63.86 points, or 0.17%, to 37,798.97, lifted by UnitedHealth shares. The 30-stock blue-chip index snapped a six-day run of losses.
Stocks were choppy in afternoon trading after Powell said the current state of economic policy should remain in place amid sticky prices.
"More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal," the central bank chief said during a panel discussion.
However, the Dow was buoyed by UnitedHealth's rally of more than 5% on the back of better-than-expected revenue for the first quarter. That outweighed fellow Dow member Johnson & Johnson, which fell around 2% on the heels of mixed quarterly results.
Morgan Stanley advanced 2.5% after beating analysts' consensus forecasts on both lines. Bank of America tumbled 3.5% after announcing profit and revenue fell.
America's largest companies have given Wall Street reason for optimism in the early innings of the new corporate earnings season. Of the less than 10% of S&P 500-listed firms that have reported financials, nearly 4 of every 5 have exceeded Wall Street consensus estimates, according to FactSet.
But higher rates weighed on investors. The 2-year U.S. Treasury yield briefly spiked above 5% on Tuesday following Powell's remarks.
"Powell moved more decidedly in a hawkish direction," said Quincy Krosby, chief global strategist for LPL Financial. "This was unfriendly for equity markets, but markets got the message."
Traders also monitored tensions in the Middle East after Iran's launch of missiles and drones at Israel on Saturday. The CBOE Volatility Index, commonly referred to as the fear gauge, hovered around 19 after popping in the previous session.
Though the Dow ended its losing streak, the down period has zapped much of its year-to-date gain. That is a major reversal considering it approached 40,000 just weeks prior.