U.S. stock indexes fell on Tuesday as Federal Reserve Chair Jerome Powell’s testimony before Congress hinted at a more hawkish monetary policy path in the world’s largest economy.

The Federal Reserve will likely need to raise interest rates more than expected in response to recent strong data and is prepared to move in “larger steps” if the “totality” of incoming information suggests tougher measures are needed to control inflation, Fed Chair Jerome Powell told U.S. lawmakers on Tuesday.

The remarks were his first since inflation unexpectedly jumped in January and the U.S. government reported an unusually large increase in payroll jobs for that month.

Traders drastically increased their bets of a 50-basis-point rate hike in March, with investors seeing a near 40% chance of such a move from 23% before the remarks.

Hawkish Powell puts 50 bp Fed rate hikes back on table

Weighing on the tech-heavy Nasdaq, the yield on two-year Treasury notes, which best reflects short-term rate expectations, rebounded to its highest since 2007 at 4.96%.

At 10:10 a.m. ET, the Dow Jones Industrial Average was down 197.91 points, or 0.59%, at 33,233.53, the S&P 500 was down 35.53 points, or 0.88%, at 4,012.89, and the Nasdaq Composite was down 108.83 points, or 0.93%, at 11,566.91.