Stocks fell Friday as investors wrapped up a volatile week ahead of the Federal Reserve's policy meeting.
The Dow Jones Industrial Average slid 288.87 points, or by 0.83%, to 34,618.24. At its lows, the index completely wiped out Thursday's 332-point rally. The S&P 500 was lower by 1.22% to 4,450.32. The Nasdaq Composite dropped 1.56% to 13,708.33.
The Dow closed out a positive week, up by 0.12%. However, the S&P 500 and Nasdaq both suffered a second straight week of losses, lower by 0.16% and 0.39%, respectively.
Information technology was the worst-performing sector in the S&P 500, down nearly 2%. Adobe shares fell more than 4% a day after the software firm posted better-than-expected quarterly results. Shares of Arm Holdings were lower by 4.2% one day after its successful public debut.
Auto stocks General Motors and Stellantis N.V. rose Friday, while Ford inched lower. Thousands of members of the United Auto Workers went on strike after failing to reach a deal with the automakers Thursday night.
Elsewhere, Lennar shares slid 2.5%. The home construction firm posted third-quarter results that beat on the top and bottom lines late Thursday.
On the economic front, the University of Michigan's consumer sentiment survey showed one-year inflation expectations dropped to 3.1% in September, tied for the lowest since January 2021. Also, the five-year outlook fell to 2.7%, matching its lowest since December 2020.
Wall Street is parsing through a mixed batch of economic data ahead of the Fed's policy decision, set to be announced Sept. 20. The central bank is widely expected to hold rates steady next week, but traders will seek insight into how policy makers are thinking about inflation from here.
On Thursday, August's producer price index showed core PPI was held in check last month, though the headline number rose more than expected. Meanwhile, August's consumer price index on Wednesday showed core CPI was slightly hotter than expected on a monthly basis.
"There was initial investor enthusiasm around inflation data coming in not too far out of expectations. On one hand, the inflation data was hotter than expected, but investors shrugged that off earlier this week thinking that the Fed would not be inclined to raise rates again next week, based on the August inflation data," said AXS Investments' Greg Bassuk.
"But I think having digested the additional economic data that's come out, as well as ongoing geopolitical pressures and other developments, we're seeing today investors pulling back and taking a breather," Bassuk added.
— CNBC's Jeff Cox contributed to this report.
