The Dow Jones Industrial Average dropped 1,008.38 points, or 3.03%, to 32,283.40, with losses accelerating into the close. The S&P 500 fell 3.37% to 4,057.66, and the Nasdaq Composite slid 3.94% to 12,141.71.

The major averages declined for a second week. The Dow tumbled 4.2%. The S&P 500 and Nasdaq Composite lost roughly 4% and 4.4%, respectively.

Powell reiterated a tough stance against inflation, spurring investors to weigh the implications of higher interest rates kept in place for a longer time.

"Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy," Powell said.