NEW YORK (AP) — Wall Street's rally ran out of momentum Tuesday, and stocks drifted lower a day after hitting their highest level since the start of August.

The S&P 500 slipped 9.19 points, or 0.2%, to 4,538.19 for just its third loss in the last 17 days. The Dow Jones Industrial Average dropped 62.75, or 0.2%, to 35,088.29, and the Nasdaq composite dipped 84.55, or 0.6%, to 14,199.98.

Retailers were mixed after several reported their earnings for the latest quarter and, more importantly, their forecasts for the upcoming holiday shopping season.

Lowe's sank 3.1% despite reporting better profit for the latest quarter than analysts expected. Its revenue fell short of Wall Street's estimates, and it also cut its forecasts for revenue and profit over the full year. Sales for do-it-yourself projects have been lower than expected at the home improvement retailer.

Best Buy dipped 0.7% after likewise beating analysts' expectations for profit in the latest quarter but falling short on revenue. Its CEO, Corie Barry, said demand from customers has been "more uneven and difficult to predict."

Best Buy cut its forecast for revenue for the full year, along with some other financial measures.

On the winning side of Wall Street was Dick's Sporting Goods, which rose 2.2%. It delivered stronger profit and revenue for the third quarter than analysts expected, as customers both bought more at each transaction and made more total purchases. The sporting goods retailer raised its forecasts for full-year results.

Retailers are closing out what's been a mostly better-than-hoped earnings reporting season for the summer. Companies in the S&P 500 are on track to deliver their first year-over-year growth in earnings per share in a year, according to FactSet.

But it's been interest rates that have been the much bigger factor moving the stock market recently. Stocks have jumped on rising hopes that inflation has cooled enough to make the Federal Reserve's next move on interest rates a cut rather than a hike.

It would be a stark turnaround after the Fed rushed to yank its main interest rate to its highest level since 2001 from virtually zero early last year. The central bank is trying to slow the economy and hurt investment prices just enough with high interest rates to smother inflation without overdoing it and causing a painful recession.

Recent economic reports suggesting a slowdown in both inflation and the economic activity that could create more inflation have pushed traders to move up expectations for when the Fed could begin cutting rates. They see a nearly 30% chance of it happening in March and a 58% probability that it happens by May, according to data from CME Group.

Such expectations have caused Treasury yields in the bond market to tumble.

The yield on the 10-year Treasury edged down to 4.41% from 4.42% late Monday. Just a few weeks ago, it was above 5%, at its highest level since 2007 and undercutting prices for stocks and other investments.

Of course, too strong a drop in Treasury yields and too big a rally in stock prices could give officials at the Federal Reserve pause. Such movements could give the economy more juice, which would put upward pressure on inflation, and could push the Fed toward hiking again.

But even the Fed officials who are generally most inclined to keep rates high have recently softened their tone some, according to economists at Deutsche Bank.

"Overall, these Fed communications reinforced our view that the likelihood of a December hike is very low and we have reached the end of hiking cycle," said the economists led by Amy Yang.

Deutsche Bank expects the U.S. economy to fall into a mild recession early in 2024 and the Fed to begin cutting rates in June. The rest of Wall Street is split on whether a recession could occur as the job market and inflation slow under the weight of high rates and yields.

Fed officials themselves talked about how uncertain the outlook for the economy is at their last policy meeting three weeks ago.

Strong spending by U.S. households could keep the economy humming, but Fed officials said at the meeting that the potential for another U.S. government shutdown and resumption of student loan repayments could act as possible weights, according to minutes released Tuesday.

Officials said at the meeting that they'll make upcoming decisions on rates based on what incoming reports say about inflation and the economy, and that "data arriving in coming months would help clarify" what's a muddied outlook.

In stock markets abroad, indexes were mixed and made mostly modest moves across Europe and Asia.

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AP Business Writer Yuri Kageyama contributed to this report.