The major domestic equity indexes were a bit lower on Thursday as Wall Street mentally prepared for a third interest rate hike this year, as the Administration began to implement new sanctions against North Korea.

The S&P and the Dow snapped a run of record closing highs and Apple was the largest drag on the three major indexes with a 1.7 percent drop on worries about demand for its latest smartphone.

The Street also increased its bet that the Fed would raise rates again this year after the central bank’s statement on Wednesday, while also assessing the Fed’s decision to start reducing its roughly $4.2 trillion portfolio of Treasury and mortgage-backed securities.

President Trump opened the door to blacklisting people and entities doing business with North Korea, further tightening the screws on Pyongyang’s nuclear and missile programs.

Fed Chair Janet Yellen said the fall in inflation this year remained a mystery, adding that the central bank was ready to change the interest rate outlook if needed.

Investors were pricing in about a 70 percent chance of a December hike, according to CME’s FedWatch tool, up from about 51 percent just prior to the Fed statement.

Only two of the 11 major S&P sectors, financials and industrials, were higher, with gains of 0.2 percent and 0.3 percent respectively. The consumer staples index was the largest decliner, down 0.97 percent drop.

Financial stocks have been on a tear in recent days as investors anticipated and then reacted to Fed commentary on rate hikes, which tend to help bank profits.

The S&P is up about 11.7 percent so far this year, helped by strong corporate profits and lingering optimism among some investors that Trump will cut taxes for businesses.

As a result, valuations have increased with the S&P 500 index trading at roughly 17.6 times expected earnings, well above its 10-year average of 14.3, according to Thomson Reuters Datastream.

Approximately 5.54 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.03 billion share average for the last 20 sessions.

Jobless Claims Fall

The Labor Department reported Thursday morning that the number of new claims for unemployment benefits declined last week by 23,000 claims to seasonally adjusted 259,000 claims for the week ended Sept. 16. A Labor Department official said Harvey and Irma affected claims for Texas and Florida.

With Hurricane Maria lashing Puerto Rico this week, weather will likely continue to affect claims data and potentially hurt job growth in September. Texas and Florida account for about 14 percent of U.S. employment.

Federal Reserve Chair Janet Yellen told reporters on Wednesday that “payroll employment may be substantially affected in September” by the storms, but she added that she expected labor market conditions would “strengthen somewhat further.”

Yellen made the comments after the U.S. central bank left interest rates unchanged but signaled it still anticipated one more rate increase by the end of the year.

Last week, unadjusted jobless claims for Texas fell 23,549, the second straight weekly drop, as the effects of Harvey faded. Claims in Texas surged in the wake of storm, which disrupted oil, natural gas and petrochemicals production, leaving some workers temporarily unemployed. Unadjusted claims for Florida rose by only 5,133 last week.

Economists had forecast claims rising to 300,000 in the latest week. It was the 133rd straight week that claims remained below the 300,000 level, which is associated with a robust labor market. That is the longest such stretch since 1970, when the labor market was smaller.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose by 6,000 claims to 268,750 claims last week, the highest level since June 2016.

The claims data covered the survey period for the nonfarm payrolls portion of September’s employment report.

The four-week moving average of claims rose by 28,250 claims between the August and September survey periods, suggesting a further slowdown in job growth. The economy added 156,000 jobs in August, with the private services sector hiring the smallest number of workers in five months.

Other data on Thursday showed manufacturing activity in the mid-Atlantic region accelerated in September amid a surge in new orders. But hiring by factories slowed and employees worked fewer hours this month compared to August.

The Philadelphia Fed said its manufacturing activity index for the mid-Atlantic region rose about 5 points to a reading of 23.8 in September. It said almost 39 percent of the firms indicated increases in activity this month while 15 percent reported a decrease.

The survey’s measure of new orders jumped to a reading of 29.5 this month from 20.4 in August. The employment index fell to 6.6 from 10.1 in August, but has now remained positive for 10 consecutive months. A measure of the average workweek dropped to a reading of 11.9 from 18.8 last month.

Firms were upbeat about the next six months, with nearly 44 percent expecting to raise capital spending. About 55 percent of companies said they expected to increase production in the fourth quarter. The firms planned to boost output by either increasing hiring or the hours of current workers.