(Bloomberg) — European equities and US futures fell after Jerome Powell indicated the Federal Reserve was in no rush to cut interest rates.

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The Stoxx 600 slipped 0.7%, on track for its fourth weekly drop, and S&P 500 futures pointed to a second day of declines on Wall Street. Yields on two-year Treasuries steadied after jumping in the previous session as traders pared back their expectations for an interest-rate reduction from the Fed in December.

A gauge of the dollar was set to rise about 1.4% for the week, having hit a two-year high on Thursday. The greenback has rallied in the wake of Donald Trump’s election win, and the latest boost came from Chair Powell’s comments that the Fed may take its time easing policy. More clarity on the Fed’s path could emerge later Friday as the US releases retail sales data and a host of Fed officials are set to speak.

“Admittedly the US dollar is pricing in a lot of Trump policy without timing or implementation detail, meaning it’s more about embracing a sweeping ‘narrative,’” said Richard Franulovich, head of FX strategy at Westpac Banking Corp. in Sydney. “Markets risk over-egging this story.”

Powell’s remarks that the Fed is not in a hurry to cut rates given the strength of the economy prompted traders to pare back expectations for a December rate cut, taking odds to less than 60% from roughly 80% a day earlier.

Several Fed policymakers have urged a cautious approach to easing, given the strong economy, lingering inflation concerns and broad uncertainty. Their comments come at a time when the equity market is showing signs of fatigue following a post-election surge that spurred calls for a pause, with several measures highlighting “stretched” trader optimism.

In Asia, MSCI’s regional index headed for its first gain this week, while China’s CSI 300 Index dropped despite signs of resilience in the nation’s economy. A monthly activity report showed retail sales expanded at the strongest pace in eight months.

Japan’s yen reversed losses after Finance Minister Katsunobu Kato said authorities are monitoring the forex market.

In commodities, oil headed for a weekly drop, weighed down by the impact of a stronger dollar and concerns the global market will flip to a glut next year. Gold held near a two-month low.

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