Wall Street’s three major equity indexes declined on Friday as a result of concern over the rise in interest rates in conjunction with technology stocks that led the decline on nerves over upcoming earnings reports and iPhone demand.

The technology index was the largest drag on the S&P 500 with a 1.5 percent drop after registering three straight days of losses ahead of a key earnings week for the sector.

Despite Friday’s decline the S&P eked out a gain of 0.5 percent for the week to show its second weekly gain in a row.

Equity investors were jittery as the 10-year Treasury yield reached its highest level since January 2014 as a bond selloff continued for a second day, driving the yield curve steeper after two weeks of flattening.

When yields are high, investors favor bonds over equities including sectors such as consumer staples and real estate, which promise high dividends and slow, predictable growth. But high interest rates can raise bank earnings, so the financial sector managed to chalk-up a 0.05 percent gain, making it the best performer out of the S&P’s 11 industry sectors.

The consumer staples sector was hurt the most with a 1.7 percent fall, led by PepsiCo.

Procter & Gamble fell 2.9 percent on top of a 4.2 percent decline the day before when it said shrinking retailer inventories and higher costs squeezed its margins.

Philip Morris also had a second day of declines after getting crushed due to weak shipment volumes in its quarterly report.

Apple fell 4.1 percent, making it the largest drag on the major indexes after Morgan Stanley estimated weak demand for its latest iPhones, a day after Taiwan Semiconductor raised fears of softer smartphone sales.

Alphabet, Facebook, Intel and Microsoft are among the major technology companies reporting next week.

S&P 500 companies are expected to report their strongest first-quarter profit gains in seven years. Of the 87 companies that have reported so far, 79.3 percent have topped profit expectations, according to Thomson Reuters I/B/E/S.

Approximately 6.45 billion shares changed hands on the major domestic equity exchanges, as compared to a 6.92 billion average over the past 20 trading days.

Where Will the Next $100 Million Come From

Consumers will shortly feel the brunt of the trade fight started by Trump with China and other countries this year when a new list of Chinese imports to be taxed is announced in coming days.

After imposing import tariffs on solar panels and washing machines in January, Trump moved to levy steel and aluminum in March along with about $50 billion in other goods.

China then responded with a list of goods that would be subject to tariffs, Trump raised the stakes on April 4 by directing the U.S. Trade Representative to consider $100 billion in additional levies.

A Reuters analysis of Chinese imports shows that to quickly reach $100 billion worth of goods to tax, Trump may have to target cellphones, computers, toys, clothing, footwear, furniture and other consumer goods, prompting price rises at our domestic retailers.

How much the news tariffs would hit wallets depends on variables that make calculating the impact of the tariffs on individual products hard to measure. Companies can absorb some of the costs, and some companies can shift production in China to other countries, cutting the final bill for America’s shoppers.

After washing machines imported by LG Electronics’ were hit with a 20 percent tariff in January, the company raised U.S. prices by about $50 per machine, or 4 percent to 8 percent.

LG opted to absorb part of the tariff cost, which was imposed at a time when construction was already well underway on its new U.S. factory that will begin producing washers in late 2018, avoiding U.S. tariffs.

Companies with complex supply chains, mainly those in high technology industries, can also change how their internal costs are charged among subsidiaries to lower their tariff bill.

Trump’s first round of import tariffs deliberately left most consumer electronics untouched, but out of the $506 billion in imports from China last year, finding another $100 billion to tax without hurting shoppers will not be easy.

The U.S. Trade Representative could quickly find $100 billion but at the cost of targeting three broad categories of consumer electronics – cellphones at $44 billion, computer equipment at $37 billion, and voice, image and data recorders at $22 billion.

Our supply chains would also be hurt as many consumer electronics products depend on the export of American semiconductors, software and other inputs to China for assembly before being imported back to the United States.

South Korea, Japan and Taiwan also supply cellphone parts for companies like Apple including displays, cameras and fingerprint scanners, and would feel the impact.

The White House could get a quarter of the way to $100 billion in goods taxed by levying toys, games and sporting goods, categories with little U.S. content that totaled about $25.5 billion from China in 2017.

However, China made up 81.5 percent of all our imports in this group, meaning that there would be few alternative sources for importers that could blunt the tariff impact on consumers.

Adding in apparel, footwear and furniture to the list would get the rest of the way to $100 billion, but price rises for those categories of goods would be seen clearly by consumers.

According to Census data, there are about 7,600 consumer and industrial goods still available for tariffs with a combined value of $101 billion where China accounts for 40 percent or less of our imports and therefore, you could possibly outsource those products elsewhere. Most involve small-scale production and a wide range of goods sold in chain stores such as Wal-Mart, including clothing, pet food and lighting fixtures.

While the availability of these items in other countries could help limit price rises, there would still be disruptions for retailers with long-established supply chains. And there are few alternatives for the $402 million in Christmas tree lights that China supplies.

Although imposing tariffs may benefit our steel and aluminum producers, costs would rise for many other producers and consumers as a result.

Domestic exporters will also feel the impact of the trade war after China responded in March by announcing tariffs on 128 products such as fruit and wine which the U.S exports to China and which will be taxed at 15 percent. Another $50 billion worth of U.S. exports such as automobiles, airplanes, pork and soybean face a 25 percent tariff.

Recession Is Not A Current Concern

As the gap between short- and long-term borrowing costs hovers near its lowest in more than 10 years, speculation has risen over whether the so-called yield curve is signaling that a recession could be around the corner.

Not to worry, two influential Federal Reserve policymakers said on Friday. Another, whose views are typically outside the mainstream at the Fed, disagreed.

Growth prospects look strong, which is why the Fed is raising short-term interest rates, the two sanguine policymakers explained. Those rate hikes, they said, are in and of themselves acting to flatten the yield curve.

In addition, they argued, the curve will likely steepen as the government runs a larger deficit and issues more debt, they said.

The calming comments, from the New York Fed’s incoming chief John Williams and from Chicago Fed President Charles Evans in back-to-back but separate appearances, appeared calculated to allay concern about a potential slowdown ahead.

“The yield curve is not nearly as much of a concern as I might have pointed to a couple months ago,” Evans said in Chicago after a speech, in response to a reporter’s question.

Williams, who will leave his current job as San Francisco Fed president in June to take over at the New York Fed, also said he expects the Fed’s shrinking balance sheet will help steepen the curve by putting upward pressure on longer-term rates.

In January, Congress passed a budget deal that raises government spending, following a December tax package that slashes corporate tax rates. Both are expected to lead to an increase in government borrowing in coming years.

The Fed policymakers reason that a bigger supply of debt should put downward pressure on Treasury prices and deliver a corresponding lift to yields.

“We’ve got more fiscal debt in train in the U.S. That has to be funded,” and will likely push up long rates and steepen the yield curve, Evans said.

At their March meeting, Fed officials “generally agreed that the current degree of flatness of the yield curve was not unusual by historical standards,” according to the meeting minutes.

Since then, longer rates have come closer to being overtaken by short rates, a phenomenon known as yield curve inversion, which has been a reliable precursor of past recessions.

Still, there is debate within the Fed over whether a flat yield curve is problem.

Dallas Fed President Robert Kaplan earlier this week said that while the Fed has flexibility to raise rates now, the 10-year yield imposes limits on how far it can do so. The 10-year yield on Friday was at 2.96 percent, the highest in more than four years.

Minneapolis Fed President Neel Kashkari, who consistently voted against rate hikes last year, said in a CNBC interview on Friday that the flattening curve was “a yellow light flashing,” a warning that the Fed should soon stop raising rates or risk braking the economy too quickly and plunging the country into recession.

Evans, who joined Kashkari in dissenting last December but who earlier this month has sounded more supportive of gradual rate hikes as the economy strengthens, isn’t buying it. “Any concerns that we may have expressed before about an overly flat yield curve, I’d put off to the side until we see things play out.”