(Reuters) – U.S. stock indexes were trading lower on Thursday, weighed down by Apple and rising expectations for a third interest rate hike this year.

The S&P and the Dow were on track to snap a string of record sessions and Apple (AAPL.O) was the biggest drag on the three major indexes with a 1.3-percent drop on concerns about demand for its latest smartphone.

Investors increased bets the U.S. Federal Reserve would raise rates again this year and were also assessing the impact of the central bank’s decision to start reducing its roughly $4.2 trillion U.S. Treasury bonds and mortgage-backed securities.

With investors reacting to the signal for another rate hike and the start of the Fed’s balance sheet normalization, the market does not appear to reflect the risks associated with U.S.-North Korea tensions and high valuations, said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.

“The market is down 10 basis points but it is very complacent and very comfortable in its own skin right now and not really concerned about risk,” said Cecchini, citing low market volatility.

The CBOE Volatility Index .VIX was slightly higher on Thursday at 9.79, but had hit its lowest level since August 8 earlier in the day.

Investors are now 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 meeting.

At 2:58 p.m. ET, the Dow Jones Industrial Average .DJI fell 36.4 points, or 0.16 percent, to 22,376.19, the S&P 500 .SPX lost 4.73 points, or 0.19 percent, to 2,503.51 and the Nasdaq Composite .IXIC dropped 21.34 points, or 0.33 percent, to 6,434.71.

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.

“Today’s movement is most likely a give-back as people digest the Fed statement and press conference,” said Michael Dowdall, investment strategist at BMO Global Asset Management.

“Clearly, the Fed doesn’t have answers on the 2017 low inflation weakness, but they’re still very sensitive to falling behind the curve so they want to stay in front of the inflation curve.”

Only two of the 11 major S&P sectors, financials .SPSY and industrials .SPLRCI, were higher, with gains around 0.4 percent. The consumer staples index .SPLRCS was the biggest decliner with a 0.95 percent drop.

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

The S&P has risen about 11.8 percent so far this year, helped by strong corporate profits and lingering optimism among some investors that U.S. President Donald Trump will cut taxes for businesses.

This has boosted valuations. The S&P is trading near 17.6 times expected earnings, compared to its 10-year average of 14.3, according to Thomson Reuters Datastream.

“It’s very hard for me to see a tremendous catalyst for the upside although I also don’t see that massive catalyst to create a crack to the downside,” said Cantor’s Cecchini.

Declining issues outnumbered advancing ones on the NYSE by a 1.23-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored decliners.