The Dow Jones Industrial Average dipped Monday to kick off the second quarter, with traders weighing fresh U.S. inflation data amid fears that the market rally could slow down.

The Dow lost 254 points, or 0.6%, while the S&P 500 shed 0.3%. The tech-heavy Nasdaq Composite dipped less than 0.1%.

Investors remain cautious about the pace of the Federal Reserve’s rate-cutting timeline this year and how soon central bankers will be able to meet their 2% inflation target. Fed Chair Jerome Powell said Friday that economic growth remains strong and inflation is still above target.

“That means we don’t need to be in a hurry to cut,” the central bank chief told public radio’s “Marketplace” program. “The economy is strong right now, and the labor market is strong right now. And inflation has been coming down. We can and we will be careful about this decision because we can be.”

Treasury yields rose following the data release and Powell’s remarks. The benchmark 10-year Treasury yield was up more than 11 basis points at 4.303%.

Markets also reacted to the personal consumption expenditures price index excluding food and energy, released Friday during the market closure for Good Friday, that showed inflation rose 2.8% in February, which was in line with expectations. The inflation gauge closely watched by the Federal Reserve also rose 0.3% from a month ago, the Commerce Department said.

The major averages are coming off a winning first quarter. The S&P 500 jumped 10.2% for its best first-quarter performance since 2019, while the Dow Jones Industrial Average added 5.6%. The Nasdaq Composite popped 9.1%.

Wall Street also wrapped up a winning March and its fifth consecutive positive month. Those monthly and quarterly gains brought the Dow to within striking distance of 40,000. However, Monday’s decline pulled it away from the milestone level.

“The market is overbought by any measure,” said Quincy Krosby, chief global strategist at LPL Financial. “At some point we will see a pullback, and then at that point, you’ll start to hear the bears come out again suggesting that it’s deeper than just a healthy correction.”

“The market needs a correction in order to start seeing more money come in from money market accounts and to feel more constructive,” Krosby added.

Correction: The S&P 500 had its best first-quarter performance since 2019. A previous version misstated the milestone.