Driven lower by banks and tech, Wall Street lost the week.

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source: thegoaspotlight.com

After the S&P 500 hit an all-time high last week, investors have pulled money off the table as the Federal Reserve moves to cut stimulus and fight inflation.

The banks and large technological values lead to another decline on Wall Street on Friday operations. All the major indexes suffered weekly losses.

The S&P 500 fell 1%, and three-quarters of companies in the benchmark closed lower. The Dow Jones industrial index fell 1.5%, and the tech heavyweight Nasdaq fell 0.1%. The indices initially rose in choppy trading before stabilizing at their latest losses.

Investors have been making money off the table as the Federal Reserve moves to reduce stimulus and fight inflation. As a result, both the S&P 500 and the Nasdaq are heading for their third weekly decline in the last four.

As Wall Street prepares for rising interest rates, the technology stocks have led the losses. Oracle fell 6.9%, the most significant decline in the S&P 500, while Adobe fell 2.6%.

Large technology companies often have high valuations based on assumptions about their future profitability. Such evaluations are often more acceptable to investors when interest rates remain low but become less desirable when interest rates rise.

The Federal Reserve has signaled its plans to accelerate the reduction in monthly bond purchases that have helped keep interest rates low. This policy change sets the stage for the Fed to start raising rates sometime next year.

" The cat is out of the bag right now, and it looks like inflation is something that is going to be more persistent in 2022, " said Charlie Ripley, senior investment strategist at Allianz Investment Management.

Small business stocks outperformed the broader market, pushing the Russell 2000 Index up 1%.

Yields bonds fell. The 10-year Treasury yield fell to 1.41% from 1.42% on Thursday. This hurt banks, which rely on higher products to charge more lucrative interest on loans. JPMorgan Chase fell 2.3%.

Losses were widespread in other sectors. Many retailers, home goods manufacturers, and industrial companies fell. For example, Home Depot fell 2.8%, Procter & Gamble 1.4%, and Caterpillar 2%.

Sectors considered less risky held out better than the rest of the market. Real estate values rose slightly. So the losses weren't as bad for the utilities and materials companies.

Some travel-related stocks, including cruise operators, were up. Royal Caribbean gained 6.2%, Norwegian Cruise Line 5.3%, and Carnival 4.4%.

The price of US crude fell 2.1% amid a broad decline in energy futures. S&P 500 energy sector stocks mostly fell. Chevron was down 1.9%. The European and Asian markets closed mostly lower.

Wall Street is also gauging the possible impact of the increase in coronavirus cases with the new omicron variant. In addition, European public health experts have urged extreme caution in the face of the latest wave.

Investors are also considering rising tensions between China and the United States amid a global supply chain already under pressure. In the United States, Congress passed a law that bans all imports from China's Xinjiang region unless companies show they were produced without forced labor.