- Stocks fell after Federal Reserve Chairman Jerome Powell stated unequivocally that interest rates will remain high for some time, casting doubt on the idea of a pivot that could jeopardize the Fed's war on inflation.

- The sell-off intensified in afternoon New York trading, with the S&P 500 having its worst day since mid-June and the Nasdaq 100 falling more than 4%. According to some traders, major equity indexes have fallen below their 100-day price averages, indicating the possibility of further losses. Treasury two-year yields, which are more sensitive to upcoming policy moves, rose in tandem with the dollar.

- Hawkish Fedspeak has become more common in recent weeks as financial conditions have eased following a stock rally that began with short covering and has restored $7 trillion to values since mid-June – and, ironically, has also been linked to dovish expectations. Another reason for Friday's rout cited by traders was concern that restrictive policy increases the likelihood of a recession next year.

- Futures contracts referencing the Fed's policy meeting in September are priced with roughly even odds of a half-point or three-quarter-point hike. The amount of additional tightening expected this year has increased slightly, with traders expecting fewer rate cuts in 2023.