The Dow Jones Industrials demurred 99.99 points to 30,423.81.
The S&P 500 dropped 24.82 points to 3,695.15.
The NASDAQ finished in the red 91.89 points to 10,680.51.
The losses ended a two-day winning streak, though all three averages are still up for the week.
The impact of higher rates is being shown sharply in the housing market, where housing starts fell faster than expected in September, the Census Bureau said on Wednesday.
The rate hike also weighed on more speculative tech stocks. Among the biggest losers in the NASDAQ were Chinese tech stocks JD.com, falling more than 7%, and Baidu, sinking 8.8%.
The declines for the broader market came even as Netflix shares rallied 13% after the streaming giant posted earnings and revenue that beat estimates as well as strong subscriber growth for the third quarter.
United Airlines climbed nearly 5% after its quarter also beat estimates on the top and bottom lines.
The solid start to earnings season comes as many on Wall Street have been resetting their earnings projections lower and investors are worried about a recession. Even though equities have rallied in the first two days of the week, Treasury yields remain high and rose on Wednesday, suggesting that recession fears are still intact.
Tech earnings will be in full swing next week, but IBM and Tesla are on deck to report Wednesday. Social media firm Snap will report later in the week.
In economic data, investors are looking forward to housing starts on Wednesday. The Federal Reserve’s so-called Beige Book, the central bank’s report on the current state of economic conditions, will come out as well.
Treasury prices recovered lost ground, dropping yields to 4.13% from Tuesday’s 4%. Treasury prices and yields move in opposite directions.
Oil prices advanced $2.84 to $85.66 U.S. a barrel.
Gold prices staggered $21.90 to $1,633.90 U.S. an ounce.