US stocks tumbled on Wednesday, reversing earlier gains after the Federal Reserve raised interest rates by 75 basis points but signaled that smaller rate hikes may be on the horizon.

The Dow had jumped more than 300 points but fell more than 200 points after Fed Chair Jerome Powell’s press conference.

In afternoon trading, the Dow Jones Industrial Average plunged 272 points, or 0.8%, to 32,381, the S&P 500 slumped 1.3% and the Nasdaq slid 1.7%.

The hike by the Fed, the fourth straight increase from the central bank of that magnitude as it attempts to bring down stubbornly high inflation and set the target federal funds rate in a range between 3.75% and 4.00%, was tempered by new language that suggested the central bank was mindful of the effect its outsized rate hikes have had on the economy.

Investors had been widely anticipating a 75-basis point rate hike, while hoping the Fed would signal a willingness to begin downsizing the rate hikes at its December meeting.

“The Fed is finally acknowledging that they’ve already done a lot and it might be prudent to slow the pace of hikes,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments in Menomonee Falls, Wisconsin.

“You can’t keep popping pills until you feel better. Sometimes you have to wait for the medicine to take effect.”

The S&P 500 had been lower prior to the policy announcement, as the ADP National Employment report showed US private payrolls increased more than expected in October, giving more reason to the Fed to continue an aggressive path of rate hikes.

The private payrolls report came on the heels of data on Tuesday that showed a jump in monthly job openings, indicating labor demand remained strong.

Investors will get more looks at the labor market in the form of weekly initial jobless claims on Thursday and the October payrolls report on Friday that will help drive expectations for interest rate hikes.

With nearly 70% of S&P 500 companies having reported earnings for the quarter, growth estimates have moved slightly higher to 4.8% from 4.7% the previous day and 4.5% at the start of October.

Advanced Micro Devices rose after it forecast some strength in its data center business, while Airbnb tumbled on a bleak holiday-quarter revenue forecast.