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Wall Street fell on Thursday in cautious trading as Federal Reserve Chair Jerome Powell was set to continue his testimony, a day after he stuck to his hawkish stance on interest rate hikes before a Senate committee.

Powell told lawmakers in Washington on Wednesday that the outlook for further rate increases are “a pretty good guess” of where the central bank is heading if the economy continues in its current direction.

Financial markets, however, are still pricing in a 25-basis-point rate increase in July and no further hikes after that, according to CME FedWatch tool.

After Powell reinforced the Fed’s inflation objective, rate-sensitive megacap companies pushed Wall Street’s major indexes lower for the third straight session on Wednesday.

Shares of Tesla slid 2.2% after Morgan Stanley downgraded the electric automaker to “equal weight” as the brokerage said the stock is “fully-valued” after its recent run.

Mark Luschini, chief investment strategist at Janney Montgomery Scott, said investors are worried that a rally led by a narrow group of stocks was “ripe”.

“In addition to that, Powell’s testimony in front of Congress yesterday did nothing to dispel concerns that perhaps the pause we had in the June meeting was simply that,” he said.

Meanwhile, there were early signs of a softening labor market as a report showed that number of people filing for state unemployment benefits for the first time held steady at a 20-month high last week.

Yields on the 2-year and 10-year Treasury notes were little changed after the data and ahead of Powell’s testimony before the U.S. Senate Banking Committee at 10 a.m. ET.

Eight of the 11 major S&P sectors declined with materials and energy leading losses.

At 9:37 a.m. ET, the Dow Jones Industrial Average was down 76.83 points, or 0.23%, at 33,874.69, the S&P 500 was down 9.83 points, or 0.23%, at 4,355.86, and the Nasdaq Composite was down 25.16 points, or 0.19%, at 13,477.04.

Spirit AeroSystems tanked 13.4% and planemaker Boeing slipped 3.5% as the parts supplier said it will suspend production at its plant in Wichita, Kansas, after workers announced a strike from June 24.

U.S.-listed shares of Accenture fell 3.9% after the IT consulting firm forecast fourth-quarter revenue below market expectations.

Darden Restaurants slid 4.0% after the Olive Garden parent forecast its annual outlook below estimates.

Declining issues outnumbered advancers for a 3.42-to-1 ratio on the NYSE and for a 2.74-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and three new lows, while the Nasdaq recorded 12 new highs and 33 new lows.

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