(Bloomberg) — Stocks fell, headed for the worst week in more than two months, as Trump trades lost steam and investors bet the Federal Reserve will have to slow the pace of policy easing.

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The S&P 500 was just off lows in the last hour of trading, with tech stocks leading declines. The benchmark has now erased over half of the trough-to-peak gains it notched after the US presidential election. Traders see slightly more than even odds of a quarter-point cut next month following comments by Jerome Powell this week indicating the Fed was in no hurry to lower rates and a report Friday on October retail sales that included large upside revisions to the prior month.

As the initial euphoria about Trump’s pro-business agenda begins to fade, investors are coming to terms with the costs of his fiscal plans and their potential to reignite inflation.

“It will come at the expense of potentially larger budget deficits, potentially larger debt and there is also the inflation dimension,” said Charles-Henry Monchau, chief investment officer at Banque Syz & Co. “There’s been a realization that there is a price to pay for this.”

The S&P 500 fell 1.3% and the tech-heavy Nasdaq 100 dropped more than 2%. Shares of all “Magnificent Seven” megacaps declined except Elon Musk’s Tesla Inc., with Amazon.com Inc., Nvidia Corp. and Meta Platforms Inc. sliding more than 3%. Applied Materials Inc., the largest US maker of chip-manufacturing equipment, suffered its worst stock decline in a month after giving a disappointing revenue forecast.

Late Friday, traders priced about a 56% chance the Fed will deliver a quarter-point reduction at its December meeting, down from 80% earlier this week. Bets on cuts were pared after Powell warned Thursday that the central bank may take its time easing policy. Boston Fed President Susan Collins said Friday a December cut remained on the table, emphasizing the central bank’s decision will be guided by incoming data.

“The market is expensive and I think Powell’s speech last night basically saying that Fed officials don’t need to rush to lower rates, that’s probably the main reason why we’re selling off specifically today,” said John Davi, CEO and CIO at Astoria Advisors, by phone. “The higher rates go, the more equity risk premiums tilt more in the favor of bonds.”

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