Stocks slide as Federal Reserve confirms its foot is on the stimulus brakes

New York(CNN Business) Wall Street ended Wednesday's session sharply lower, as investors dealt with Omicron headlines as well as the Federal Reserve's December meeting minutes that confirmed the central bank has its foot on the stimulus brakes.

The Dow (INDU), which hit a record high Tuesday, closed down 1.1%, or 393 points.

The S&P 500 (SPX), the broadest index tracking US equities, finished 1.9% lower, marking its worst day since late November. The tech-heavy Nasdaq Composite (COMP) dropped a whopping 3.3%. It was its worst performance since February 2021.

It was a relatively busy day for economic news, which included an ADP Employment Report that blew past expectations. More than 800,000 private payrolls jobs were added last month, the report said, more than double what economists had expected. This bodes well for the government's jobs tally due Friday and is good news for any investor betting on the economic recovery.

Last month, the Federal Reserve said it would wrap up its stimulus program faster than originally announced, and it updated its economic projections to show multiple interest rate increases this year. The meeting minutes also reflected this hawkish shift. The bankers also began to discuss "the appropriate size and composition of the Federal Reserve's balance sheet in the longer run," the minutes showed.

Some of the bankers also said the Fed's enormous balance sheet could be reduced more quickly than during the last rate raising cycle.

That part of the minutes "is likely going to be further scrutinized in upcoming meetings. [It] Seems like the Fed wants to move quicker than it has in the past and yields, across the curve, are moving higher at the prospects of a quicker tightening timeline," Lawrence Gillum, Fixed Income Strategist for LPL Financial, said.

The 10-year US Treasury yield climbed above 1.7% Wednesday, a level it hadn't crossed since October.