Stocks fell sharply on Wednesday, with the Dow Jones Industrial Average on pace for its worst day in over a month, as higher Treasury yields weighed on market sentiment.

The 30-stock Dow shed 503 points, or 1.2%. That put the benchmark on track for its biggest one-day loss since Sept. 3 — when it lost 1.5%. The S&P 500 dropped 1.3%. The Nasdaq Composite lost about 2.1%.

Both the Dow and S&P 500 were headed for their third straight losing session.

At its session high, the benchmark 10-year Treasury note yield topped 4.25%, reaching its highest level since July 26.

Robust economic data and deficit worries are among the factors behind the rise in the 10-year Treasury yield, despite a half-point rate cut from the Federal Reserve in September. Traders are also growing concerned that central bank policymakers may be less inclined to reduce rates, even as the Fed had forecasted another half-point worth of trimming before the year ends.

“To me, it’s all about the impact of higher rates. The market is repricing the probability that the Fed can aggressively cut rates,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management. “There have been parts of the economy that haven’t felt the impact of rising interest rates yet, but the longer rates remain higher, the more different parts of the economy have to reprice to that reality … the economy is out of equilibrium.”

The most overvalued part of the U.S. equity market is large caps, he said, adding that he believes the market is due for a pullback in the near term as recession risks linger.

On the earnings front, shares of Coca-Cola dipped about 2% even though the company posted a third-quarter beat. Apple shares dropped more than 3%.

Dow member McDonald’s fell more than 4% on Tuesday after the U.S. Centers for Disease Control and Prevention said an E. coli outbreak tied to the fast-food giant’s Quarter Pounder burgers has resulted in 10 hospitalizations and one death. McDonald’s accounted for more than 100 points of the decline in the Dow.