Stocks closed lower on Wall Street Wednesday after minutes from the Federal Reserve’s last meeting raised expectations that the central bank will move faster to raise interest rates to fight inflation. The S&P 500 fell 1.9%.

Drops in major technology stocks were the biggest weight on the market.

The tech-heavy Nasdaq pulled 3.3%. The Dow Jones Industrial Average of 30 blue-chip companies slipped 1.1%, easing back from the record high it set a day earlier. Small-company stocks also posted sizable losses. Bond yields rose after the Fed minutes came out. The yield on the 10-year Treasury note rose to 1.70%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks fell broadly on Wall Street in afternoon trading Wednesday after the minutes from the Federal Reserve’s last meeting of policymakers signaled increasing concerns about inflation.

The S&P 500 was down 1.3% as of 3:03 p.m. Eastern. Technology companies accounted for much of the decline in the benchmark index, which had been down about 0.4% before the afternoon release of the Fed minutes.

The Dow Jones Industrial Average lost an early gain and was down 199 points, or 0.5%, to 35,598. The tech-heavy Nasdaq slumped 2.7%.

Bond yields rose after the minutes from the Fed meeting came out. The yield on the 10-year Treasury note, a benchmark for setting rates on mortgages and many other kinds of loans, rose to 1.70% soon after the minutes were released, from 1.68% just before.

The Fed minutes showed that the central bank’s policymakers at their meeting last month expressed concerns that surging inflation was spreading into more areas of the economy and would last longer than they previously expected. The Fed officials also concluded that the U.S. job market was nearly at levels healthy enough that the Fed’s low-interest rate policies were no longer needed.

For both those reasons, Fed Chair Jerome Powell said after the Dec. 14-15 meeting that the central bank was accelerating the reduction of its ultra-low interest rate policies.

Wall Street appeared to read the minutes as a sign that the central bank will be perhaps more aggressive about rolling back the economic stimulus policies it put in place after the pandemic, which could mean a faster road to higher interest rates.

“We believe the Fed is likely to raise interest rates quicker and potentially shrinking their balance sheet sooner than many expect as they signal fighting inflation is more important than protecting against a drop in economic activity,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

Roughly 65% of stocks in the benchmark S&P 500 were down. Technology companies, which led gains on Monday and then pulled the broader market lower on Tuesday, were the biggest weigh on the index. Microsoft fell 3% and software maker Adobe shed 6.8%.

A mix of retailers and other companies that rely on consumer spending also lost ground. Tesla slid 3.9% and Amazon fell 1.4%.

U.S. crude oil prices rose 1.1%, helping to boost energy companies. Exxon Mobil rose 1.6%.

AT&T rose 3.5% after giving investors an encouraging update on subscriber growth.

European markets closed mostly higher and Asian markets closed mostly lower overnight.

Investors are dealing with a busy first week of the new year with a wide range of economic data. The latest latest reports on different sectors of the economy and the employment market come as Wall Street continues gauging the potential economic impact of rising inflation and the latest wave of COVID-19 cases.

On Thursday, the Institute for Supply Management will release its service sector index for December, giving Wall Street a better picture of how the economy’s largest sector is handling the latest surge of COVID-19 cases from the highly contagious omicron variant.

On Friday, the Labor Department will release its monthly employment report for December.