Why did the stock market fall today? He finally heard Jerome Powell’s message loud and clear.

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Jackson Hole has come and gone, and the only surprise may be that the stock market was surprised.

But he was surprised. The stock market started last week on its back foot, an appropriate response as investors seemed to realize that they may have overestimated the chances of a dovish Federal Reserve. Yet the market regained ground ahead of Friday’s meeting as investors bought the dip. So, President Jerome Powell started talking. He told symposium attendees that the Fed needed to get inflation back to its 2% target, that it would take time, and that another big interest rate hike was likely in September. The speech, which could have lasted 30 minutes, only took 10.

“Fed Chairman Jerome Powell’s speech today at the Fed conference in Jackson Hole was short and hawkish,” writes Ed Yardeni, chief investment strategist at Yardeni Research. “He quashed any lingering expectation that the Fed suspend its clamping and could push interest rates down next year.

Has it ever, and the markets haven’t missed the message. The Dow Jones Industrial Average fell 3% on Friday and ended the week down 4.3%, while the

S&P500

the index fell 3.4% to close the week at 4.%. These are their worst weeks since June.

It’s not that investors are worried about what will happen at the next meeting. According to FedWatch CME Tool, the futures market was pricing in a 61% chance of a three-quarter-point rate hike after Powell’s speech on Friday, up from 64% the day before. The real fear doesn’t seem to be how big the next hike will be, but when the hikes will stop and how long rates will stay high, even if it means triggering a recession. “[We] don’t think the central bank is ready to ‘pivot’ just yet,” writes Thomas Mathews, market economist at Capital Economics. “This, we suspect, means the central bank will remain a headwind for markets for some time to come.”

And especially for expensive growth stocks. It should come as no surprise that tech specialists

Nasdaq Compound

took the brunt of the damage, falling 3.9% on Friday to end the week down 4.4%. This makes sense, given that expensive growth stocks are the most sensitive to rising interest rates, and stocks like

Nvidia

(symbol: NVDA) and

Commercial counter

(TTD), which trade at 42.7 and 57.9 times earnings respectively, are still not cheap.

However, investors are unable to leave them. According to data from Goldman Sachs, growth mutual funds loaded up with stocks trading at 20 times company value/sales or more during the second quarter of the year. This meant adding actions like

Snowflake

(SNOW), Trade Desk and Nvidia, among others. This worked well during the rotation of the June low, but could be particularly painful if the Fed were to raise rates higher than investors expected. and sub-sectors and ‘long-lived’ stocks are the hardest hit,” writes Wolfe Research strategist Chris Senyek.

This could be difficult until the next Fed meeting on September 2.

Write to Ben Levisohn at Ben.Levisohn@barrons.com