Mega-cap rebound lifts stocks from worst levels; Treasury yields retreat

S&P 500 and Nasdaq closed down 0.2% after recovering from steeper losses, aided by a retreat in Treasury yields from a 5.36% high. The Russell 2000 fell 1.3% and the S&P Mid Cap 400 dropped 1.6%, highlighting a divergence between mega-cap tech and the broader market. Industrials lagged on Caterpillar weakness, while health care led. The 10-year yield settled at 5.28% after a strong auction. FOMC minutes showed most policymakers expect another rate hike by year-end.