New data released Tuesday flashed a sign that the US economy could be losing steam.

S&P Global's flash US composite PMI, which captures activity in both the services and manufacturing sectors, came in at 50.9 in April, its lowest reading in four months. April's print was down from the 52.1 reading seen in March and below economists' expectations for 52.

S&P Global Market Intelligence chief business economist Chris Williamson told Yahoo Finance that the composite reading above 50 indicates the economy still grew in April. But the decline from previous months shows a "little bit of a wobble" for economic activity to start the second quarter.

"It's going to be interesting to watch this and see how that persists," Williamson said. "But certainly, the second quarter so far is not looking as strong as the first quarter, which I think is pretty much in line with what most people were anticipating. It was a good start to the year, [and now it's] losing some momentum."

After hitting a 20-month high in January, overall business confidence took a hit, reaching its lowest level since November. April's report also showed a decline in new orders for the first time in six months while companies scaled back on employment for the first time in nearly four years.

Williamson noted the tick lower in business expectations for the year ahead was likely impacted by the shifting narrative around monetary policy. In January, when business confidence was booming, markets were pricing in a range of six or seven interest rate cuts from the Federal Reserve this year. Since then, expectations have shifted, and consensus now expects closer to two interest rate cuts in 2024, per Bloomberg data.

This has sent Treasury yields soaring, with the 10-year Treasury yield (^TNX) up nearly 80 basis points from the start of February. That, Williamson noted, tightens financial conditions and can weigh on sentiment.

"You've got demand pulling back slightly as sort of a readjustment, if you like, of the demand environment in the light of this new rates environment,” Williamson said.

Tuesday's PMI release was one of the first signs that higher-for-longer interest rates are cooling an economy that's grown faster than many expected to start 2024. Given recent hotter-than-expected inflation reports, some have questioned whether the strong data could be playing a role in inflation not falling as quickly as many projected.

Tuesday's data provided a reprieve in the bond market, and the 10-year Treasury yield slipped by about six basis points immediately following the report.