Stocks moved in small increments as the prospect of further Fed policy tightening lifted Treasury yields and investors remained on the sidelines amid bank earnings.

In afternoon New York trading, the S&P 500 recovered losses. The Nasdaq 100, which is heavily weighted towards technology, underperformed major equity benchmarks. Two-year interest rates rose to around 4.2% as investors reduced their expectations for rate cuts later in the year.

Richmond Fed President Thomas Barkin wants to see more evidence that US inflation is returning to the central bank's 2% target. Manufacturing activity in New York State unexpectedly increased in April for the first time in five months, as new orders and shipments rebounded.

The stock of Charles Schwab rose after executives said the company can weather the turmoil roiling US banks, while halting stock buybacks in response to the industry's worst crisis since 2008.