Treasury yields rose again Tuesday after a report showed U.S. workers won bigger gains in wages and benefits than expected during the first three months of the year. While that’s good news for workers and the latest signal that the job market remains remarkably solid despite the negative effects of high interest rates, it feeds into worries that upward pressure remains on the economy and inflation.

The yield on the 10-year Treasury rose to 4.67% from 4.61% just before the report’s release. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose back above the 5% level to 5.01% from 4.97% late Monday.

No one expects the Federal Reserve to change its main interest rate on Wednesday following its latest policy meeting, but traders are now mostly betting the Fed will cut rates either one or zero times this year, according to data from CME Group. That’s a big letdown after traders came into the year forecasting six or more cuts.

The Fed itself was earlier penciling in three cuts to rates during 2024, but top officials have recently hinted rates may stay high for longer as they wait for more confirmation inflation is heading down toward their 2% target. The Fed’s main interest rate is sitting at the highest level since 2001.

Without the benefit of easing interest rates, companies will need to deliver bigger profits in order to support their stock prices, which critics have called too expensive following their run to records.

McDonald’s fell 2% after its profit for the latest quarter came up just shy of analysts’ expectations. It was hurt by weakening sales trends at its franchised stores overseas, in part by boycotts from Muslim-majority markets over the company’s perceived support of Israel.

GE Healthcare Technologies tumbled 9.2% after it reported weaker results and revenue for the latest quarter than analysts expected. F5 dropped 8.6% despite reporting a better profit than expected. Its revenue fell short of forecasts, and it said customers were remaining cautious and forecasting largely flat IT budgets for the year.

On the winning side was 3M, which rose 3.2% after reporting stronger results and revenue than forecast. Eli Lilly climbed 6.4% after turning in a stronger profit than expected on strong sales of its Mounjaro and Zepbound drugs for diabetes and obesity. It also raised its forecasts for revenue and profit for the full year.

This earnings reporting season, which is close to its halfway point, has largely been better than expected. Not only have the tech companies that dominate Wall Street done well, so have smaller companies across a range of industries.

That’s a change from the recent past, and it helped push strategists at Deutsche Bank to raise their forecast for full-year earnings growth. Many companies are topping forecasts because they’ve been able to wring more profit out of each $1 of revenue than analysts were expecting, according to Binky Chadha, chief strategist at Deutsche Bank.

In stock markets abroad, Japan’s Nikkei 225 rose 1.2% after reopening following a holiday. The government reported stronger-than-expected gains in industrial production for March.

Indexes were mixed across much of the rest of Asia and Europe.

___

AP Business Writers Yuri Kageyama and Matt Ott contributed.

An update on the ceasefire negotiations – Hamas officials have left Cairo after talks with Egyptian officials on a new proposal.

Egyptian media reported that a Hamas delegation will return to Cairo with a written response to the ceasefire proposal, without saying when.

The delegation, chaired by senior Hamas official Khalil al Hayya, held talks with Egyptian officials on Monday that focused on an Egyptian-crafted proposal to establish a ceasefire in Gaza.

US secretary of state Antony Blinken is expected to visit Israel on his latest trip to the region, which began on Monday in Saudi Arabia. 

He said Israel needs to do more to allow aid to enter Gaza, but that the best way to alleviate the humanitarian crisis is for the two sides to agree to a ceasefire.

Mr Blinken also put pressure on Hamas to accept Israel’s  latest “extraordinarily generous” proposal.

For context: Along with Qatar and the United States, Egypt is mediating between Israel and Hamas to secure a truce after nearly seven months of war.

In recent weeks, Egypt has stepped up mediation efforts in hopes of averting an assault on Rafah, Gaza’s southernmost city on the border with Egypt where more than half of the enclave’s population is sheltering.

Israeli media said Israel had softened its position in the talks, and is now seeking the release of 33 hostages — down from 40 — in return for the release of some 900 Palestinian prisoners. 

Hamas is believed to hold around 100 Israelis in Gaza and the remains of at least 30 more.