Fed chair Jerome Powell’s hawkish statement on Thursday, which resisted early US interest rate cuts, caused a significant market reaction and prevented the S&P500 from achieving an eighth consecutive daily gain.

Powell’s statement indicated that the central bank was not certain if its policy stance was restrictive enough to return inflation to 2%.

The Treasury market suffered a worse hit due to weak demand at the recent long bond auction, with two-year yields rising more than 10 basis points to over 5%. The 30-year auction ended at 4.769%, higher than projected, suggesting investors paid a premium for the bond.

The Fed’s’reverse repo’ facility has seen daily deposits below $1 trillion for the first time since late summer 2021 due to liquidity draining.