Wall Street’s main indexes closed lower today after Federal Reserve Chair Jerome Powell dampened investors’ hopes for another interest rate cut this year by saying the U.S. central bank need not rush to ease monetary policy.

Powell said at a Dallas Fed event that with the economy still growing, the job market solid and inflation still above the 2% target, the Fed can deliberate carefully on rate cuts.

While traders were still betting on a 25-basis point reduction at the Fed’s December meeting, the probability fell to 62% from 76% earlier in the afternoon and from 82.5% on Wednesday, the CME FedWatch tool showed.

“The comments from Powell put more cold water on what used to be a very optimistic outlook on the path for rate cuts,” said Adam Hetts, global head of Multi-Asset at Janus Henderson Investors.

“However, we can’t take for granted that inflation and labor are in balance so this is an encouraging message on the economy.”

As of 4:13 p.m. ET, the Dow Jones Industrial Average fell 207.33 points, or 0.47%, to 43,750.86, the S&P 500 lost 36.21 points, or 0.60%, at 5,949.17 and the Nasdaq Composite dropped 123.07 points, or 0.64%, to 19,107.65.

Powell spoke after data showed the producer price index for final demand rose 0.2% on a monthly basis in October, in line with forecasts, though the annual rise of 2.4% was a touch higher than expectations.

Jobless claims dropped 4,000 to a seasonally adjusted 217,000 for the week ended Nov. 9, lower than forecast.

“There’s more and more evidence that inflation remains higher than the Fed’s 2% target,” said Melissa Brown, managing director for Investment Decision Research at SimCorp in New York. “The numbers were roughly in line with expectations but sometimes investors step back and say, ‘What does this really mean?’ It leads to more uncertainty about what the Fed does after the December meeting.”

Last week’s post-U.S. election rally has been waning as focus has also turned to potential inflationary pressures from policy changes such as higher tariffs expected from President-elect Donald Trump’s administration.

Some other Fed policymakers have shifted their attention back to inflation risks as they weighed in on when, and how fast and far, to cut interest rates.

Richmond Fed President Tom Barkin said high union wage settlements and the possibility of coming tariff increases could make Fed officials more cautious about thinking they have won their battle against high inflation.

Among the S&P 500’s 11 major industry sectors, industrials was the biggest decliner, losing 1.7% on the day, with some of its biggest drags from defense companies, which had rallied sharply in the days after the election.

RTX Corp was the defense sector’s biggest weight today, ending down 3.9% after falling to its lowest level since Sept. 19. General Dynamics was also a big drag, ending down 6.9% after hitting its lowest level since Oct. 31.

The blue-chip Dow had some support from a 6% rally in Walt Disney after the entertainment giant reported quarterly earnings that beat Wall Street’s estimates and offered robust guidance for the coming years.

Consumer discretionary was the second weakest S&P 500 sector, falling 1.5%, with some pressure from electric vehicle makers.

Shares of EV maker Tesla closed down 5.8% and Rivian Automotive dropped 14.3% after Reuters reported that Trump’s transition team is planning to kill the $7,500 consumer tax credit for electric vehicle purchases as part of broader tax-reform legislation.

Tapestry shares closed up 12.8% after hitting their highest level since July 2013. The Coach parent said it was terminating its $8.5 billion deal for Capri Holdings after the deal was blocked by a U.S. judge. Capri’s shares rose 4.4%.

Declining issues outnumbered advancers by a 1.8-to-1 ratio on the NYSE where there were 177 new highs and 90 new lows.

On the Nasdaq, 1,362 stocks rose and 2,912 fell as declining issues outnumbered advancers by a 2.14-to-1 ratio. The S&P 500 posted 26 new 52-week highs and 12 new lows while the Nasdaq Composite recorded 81 new highs and 190 new lows.

On U.S. exchanges 15.34 billion shares changed hands compared with the 13.68 billion average for the last 20 sessions.