yield on the 2year treasury note advanced to 47 us stocks ended sharply lower on tuesday with major indexes suffering the worst daily percentage declines in over two months as downbeat guidance from major retailers rising treasury yields and economic data added to worries that the federal reserve may need to lift interest rates higher and hold them there for longer to tame price pressures us markets were closed monday for the presidents day holiday investors returned from the long weekend on tuesday in a downbeat mood as the feds expectations on higher terminal rates continued to rattle stockmarket investors three major benchmark indexes booked their worst daily percentage declines since dec 15 according to factset data the sp 500 has cut its yeartodate gain in half on a percentagepoint basis since peaking at 4195 on feb 2 according to factset data the largecap index rose 41 so far this year the dow industrials however has wiped out nearly all of its yeartodate gain last week a flurry of hotterthanexpected inflation reports and commentary from federal reserve officials spurred investors to bet on more interestrate hikes by the central bank fed funds futures traders are pricing in a 76 probability that the fed will raise interest rates by a quarterofa percentagepoint to between 475 to 5 on march 22 followed by another 25basispoint hike in may according to the cme fedwatch tool meanwhile traders continued to nudge up expectations for the peak in the fedfunds rate with a few traders now penciling in a peak near 6 overall traders have only recently come around to the feds expectation for the fedfunds rate to peak just above 5 while the stock market has staged an impressive rebound so far this year markets are still trying to adjust to the reality that the fed is unlikely to pivot and is instead still focused on fighting inflation which suggests that investors should be prepared for interest rates to stay higher for longer said carol schleif chief investment officer at bmo family office in minneapolis wednesdays fomc minutes report is bound to reveal a closer look into the feds thinking especially given the recently released inflation and jobs numbers which are still elevated and illustrative of a hot economy she said minutes of the feds jan 31feb 1 policy meeting will be published on wednesday 2 pm eastern seewhy the stock market isnt as forwardlooking as investors might think when it comes to a recession on tuesday yields for the 2year treasury note were coming close to the highest point in 15 years jumping to 469 the yield on the 10year treasury advanced to 3902 rising rates due to the markets repricing of a potentially higher for longer monetary policy path have weighed on risk appetite said adam turnquist chief technical strategist at lpl financial benchmark 10year treasury yields have now cleared key resistance at 390 elevating upside risk in yields which will likely continue to weigh on equities seebiden vows russia will never win war against ukraine tensions over russias invasion of ukraine as the first anniversary of the war approaches also added to the market anxiety us president joe biden visited poland on tuesday and will consult with allies from natos eastern flank after paying an unannounced visit to kyiv on monday readinvestors have pushed stocks into the death zone warns morgan stanleys mike wilson meanwhile chinese president xi jinping plans a visit to moscow for a summit with vladimir putin in the coming months wang yi the countrys top diplomat is scheduled to visit moscow this week seea potential stockmarket catastrophe in the making the popularity of these risky option bets has wall street on edge seestockmarket rally could peak before first quarter is over say jpmorgan strategists us economic data on tuesday included the sp flash services which rose to a 8month high in february at 505 up from 468 in the prior month the us manufacturing pmi climbed to the fourmonth high of 478 up from 469 while both are increases any number below 50 points to a potentially shrinking economy existinghome sales dropped to the lowest point in a decade tuesday data showed januarys 07 decline is the 12th straight monthly decline according to the national association of realtors figures movers  shakers home depot and walmart slip after earnings guidance facebook parent meta rises on trial of subscription tier