Stocks suffer weekly losses following Fed's comments, Dow gains 100 points on Friday.

On Friday, U.S. stocks experienced losses for the week, as investors anticipated tighter monetary policy from the Federal Reserve. The S&P 500 and Nasdaq both retreated from their three consecutive weeks of gains.

The stock market indices experienced varying movements, with the Dow Jones Industrial Average rising 137.55 points or 0.4%, the S&P 500 declining 0.27%, and the Nasdaq Composite falling 1.34%.

The S&P 500, Nasdaq, and Dow all experienced declines in major averages for the week, with the S&P 500 closing down 1.27%, Nasdaq 3.86%, and the Dow dipping 0.28% week-to-date.

The Federal Reserve's change in tone prompted investors to react, resulting in market moves as the Fed signaled it would take more aggressive action against inflation.

According to Adam Crisafulli of Vital Knowledge, the market is currently waiting for the next data point as the bad news has been fully absorbed, and there is no rush of buyers into the market.

The Fed Governor Lael Brainard's remarks on Tuesday morning were the only significant event this week, and the following days have been spent processing her words, according to him.

The tech industry experienced losses as investors sold off riskier shares in anticipation of higher interest rates, which could limit the industry's future profit growth. Specifically, chipmakers Nvidia and Micron, which have faced supply chain shortages and recession concerns, dropped 4.5% and 1.4%, respectively, while Tesla, Alphabet, and Apple all slid 3%, 1.9%, and 1.2% lower.

Nearly 7% of Robinhood's shares dropped after Goldman Sachs changed its rating from neutral to sell. UPS fell nearly 1% due to a downgrade from Bank of America, which cited concerns about weakening demand and declining prices in the industry.

This week, the health-care and consumer staples sectors experienced a rally as investors shifted their focus from concerns about a slowing economy to stocks with consistent earnings. Merck and UnitedHealth Group both saw gains of 5% and 6.5%, respectively, and closed the week higher.

JPMorgan Chase and American Express recovered some of their earlier losses, rebounding in the financial sector.

The Fed's decision to reduce its bond holdings by $95 billion, as revealed in the minutes from its March meeting, has led to Friday's moves. Additionally, the central bank is considering raising interest rates by 50 basis points in future meetings.

Earlier in the week, Brainard suggested that the central bank may begin reducing its balance sheet at a "rapid pace" starting in May.

According to Kathy Bostjancic, chief U.S. economist at Oxford Economics, the Fed's funds rate is their primary tool, but they will also remove liquidity from the system by reducing their purchases of treasury and mortgage-backed securities by a trillion per year. This will leave a gap that private investors will have to fill.

The 10-year Treasury yield has surged to a new three-year high, reaching 2.7% on Friday, after the Fed raised rates. Last week, the rate was 2.38%, and it began the year at 1.63%.

The rapid hiking cycle suggests that the Fed's (and most economists') 'transitory inflation' narrative was overly optimistic, and the Fed now has to act quickly to catch up, as they have fallen behind the curve, according to Maneesh Deshpande, head of U.S. equity strategy at Barclays. However, we remain cautious and believe the upside is limited.

On Friday, oil prices rose slightly, with WTI gaining 2.32% and settling at $98.26, while Brent crude gained 2.19% and settled at $102.78. Energy companies including Occidental Petroleum and Halliburton closed higher on Friday.

Earnings season is approaching next week, with reports from five major banks, including JPMorgan Chase, Citigroup, and Bank of America, set to be released before the market opens on Wednesday and Thursday.