The Dow dropped 3.5% last week, while the S&P 500 and Nasdaq dipped 1.9% and 0.2%, respectively, on the week.
Sectors tied to the economic recovery led last week’s dip. The S&P 500 financials and materials sectors lost more than 6% on the week, while energy fell more than 5% and industrials dropped more than 3%.
“Investors may be interpreting the Fed’s hawkish tilt Wednesday as a sign that an extended US post-pandemic economic expansion may be a bit harder to achieve in a potentially emerging environment of less accommodative monetary policy,” Goldman Sachs’ Chris Hussey said in a note.
The Treasury yield curve also flattened last week. The yields of shorter-term Treasurys, like the 2-year note, rose — reflecting expectations of the Fed raising rates. Longer-term yields, like the 10-year note, retreated — a sign of less optimism toward economic growth.
Investors await public appearances from Fed members on Monday. Bullard and Dallas Fed President Robert Kaplan are set to speak virtually on a Official Monetary and Financial Institutions Forum panel at 9:00 a.m. ET. New York Fed President John Williams is expected to deliver remarks at a Midsize Bank Coalition of America event Monday afternoon.