The Dow fell about half a percent. The S&P lost more than 1%, and the Nasdaq dropped nearly one-and-a-half percent.
A mixed bag of economic data, led by better-than-expected retail sales, cemented the likelihood of another 75 basis-point interest rate hike from the Fed at the conclusion of next week's monetary policy meeting.
But David Berman, Portfolio Manager of Durban Capital, said the Fed needs to be even more aggressive - and shock the economy in order to tame inflation, which he calls "a very serious issue."
"The one thing I will say is that I've been a little disappointed in the Fed and how they've transmitted to the marketplace, slowly, at what their intentions are. In other words, the intentions of the Fed are, by the time they make the announcement, are well known. There's no sort of shock factor. I would like to see the Fed sort of raising rates and do something that's a little bit of a shock factor to say, 'We mean business.'"
Interest rate-sensitive banks helped soften the Dow's decline, but the sell-off, which gathered momentum toward the end of the session, saw market leaders including Microsoft, Apple and Amazon hitting the tech-laden Nasdaq.
Shares of railroad operators Union Pacific and Norfolk Southern outperformed the broader market after the Biden administration helped broker a tentative deal with unions to avert a strike.
And Adobe tumbled after the company said it would buy software firm Figma in a deal valued at about $20 billion.
