The major US equity benchmarks closed lower in a holiday-shortened trading week. The Nasdaq suffered its first weekly decline in two months, while the S&P 500 Index recorded its first drop in six weeks. Growth stocks outperformed value shares, while large-caps fared better than small-caps. Signs that further Federal Reserve rate hikes lay ahead seemed to weigh on sentiment for much of the week. In prepared testimony before Congress on Wednesday and Thursday, Fed Chair Powell stated that “nearly all expect that it will be appropriate to raise interest rates somewhat further by the end of the year.” Much of the week’s macro economic data seemed to deepen worries that tight monetary policy was pushing the U.S. into recession. On Friday, S&P U.S. manufacturing activity fell back to its lowest level since December and well below consensus estimates. Meanwhile, the US labor market remained tight, as weekly jobless claims hit 264,000, the highest level since October 2021. Housing starts coming in at their highest level in over a year and well above forecasts. In Europe, the STOXX Europe 600 Index fell 2.93% on worries that further interest rate increases might cause a recession in Britain and the eurozone. In the UK, the BoE unexpectedly raised its key interest rate by half 50 basis points to 5.0%—the highest level since 2008. Swiss, Norwegian central banks hike borrowing costs to beat inflation. The dollar rose while bitcoin hit a one-year high.