“This rise in interest rates…if it doesn’t stop here somewhere around this 4.4% level, 4.5% or so, and we start to retest the levels that we saw in last October by 5%, this could not only put small caps, but the market itself on its heels,” Luschini said.

The CBOE Volatility Index, also known as Wall Street’s “Fear Gauge,” lost 4.22 points to close at a six-week low of 16.27.

Rate-sensitive real estate, down 2.64%, and utilities, down 0.98%, were among the few sectors falling on the day as investors weighed the chances that Trump’s policies stimulate inflation and change the trajectory of the Federal Reserve. interest rates, which have been a key driver of Wall Street’s recent rally.

The central bank is widely expected to cut its benchmark interest rate by 25 basis points at its monetary policy meeting that ends on Thursday. However, traders have started to reduce their bets on a December cut and the number of cuts expected next year, according to CME’s FedWatch tool, opens in a new tab.

Strong gains were also made by shares of cryptocurrency companies, energy companies and prison operators, while renewable energy stocks fell.

Markets also questioned whether the Republican Party could maintain its majority in the House of Representatives after taking control of the U.S. Senate, leading to less opposition to Trump’s agenda.

Advancing issues outnumbered declining issues by a ratio of 1.51 to 1 on the NYSE and 1.84 to 1 on the Nasdaq.

The S&P 500 posted 138 new 52-week highs and 12 new lows, while the Nasdaq Composite recorded 456 new highs and 115 new lows.

Volume on U.S. exchanges totaled 18.68 billion shares, compared to an average of 12.16 billion for the entire session over the past 20 trading days.