The S&P 500 index, which represents the top 500 US stocks, closed Friday’s session down 1.3%. For the week, the S&P 500 lost 1.2%.
The Dow Jones Industrial Average, which comprises stocks of 30 large US corporations, finished the day down 0.9%. For the week, the Dow fell 0.2%.
The Nasdaq Composite Index, which comprises marquee names in technology such as Amazon, Apple, Netflix and Google, settled Friday’s trade down 2%. For the week, the Nasdaq tumbled 2.6%.
Stocks gave up their upward trajectory since Wednesday, after the Fed’s minutes from its July meeting failed to give a clear indication of the upcoming September 21 rate hike.
Fed officials have said that US rate hikes could slow at some point if inflation continues retreating from the four-decade highs seen earlier this year.
But some key policy-makers on the central bank’s Federal Open Market Committee also wanted rates to be retained at a “sufficiently restrictive level” for an appreciable period of time to stop inflation in its tracks.
“The data-dependent central bank is looking at a strong economy that could handle at the very least a couple more massive 75 basis-point rate hikes if inflation does not cool quickly,” Ed Moya, analyst at online trading brokerage OANDA, said.
Until the Fed’s July meeting minutes released Wednesday, traders had been betting on the Fed raising rates by just 50 basis points at its next meeting in September, versus previous wagers for a 75 basis-point hike.
The Fed has carried out four rate hikes since March, bringing key lending rates from nearly zero to as high as 2.5% by July.
Inflation, as measured by the Consumer Price Index (CPI), however, remains at more than four times the US central bank’s annual target of 2%. The CPI grew at 8.5% during the year to July. Prior to that, the CPI expanded at its fastest pace in four decades, growing 9.1% during the year to June.