The decision by the U.S. Federal Reserve to hike interest rates for the first time this year left North American stock markets in the red Wednesday, even though the move had been anticipated for several weeks.

In Toronto, the S&P/TSX composite index dropped 188.09 points, or 1.22%, at 15,197.18, with all sectors finishing the day negative.

Gold was the biggest decliner on the market, losing 4.55%, followed by the materials sector at 2.77% and energy sector at 2.28%.

On Wall Street, the Dow Jones industrial average lost 118.68 points to 19,792.53 and the S&P 500 slipped 18.44 points to 2,253.28. The Nasdaq composite edged down 27.16 points to 5,436.67.

The Fed announced it was raising its key interest rate by a quarter point to a range of 0.5% to 0.75% due to signs of a growing economy and expectations for higher inflation.

This is only the second time the Fed has increased rates in a decade and the first time since December 2015, when it raised it from a record low near zero that was set during the 2008 financial crisis.

The Fed also updated its forecast, anticipating that there will be three rate increases in 2017, instead of the two predicted back at its last policy meeting in September.

Sadiq Adatia, chief investment officer at Sun Life Global Investments, said the upgrade may have come as a surprise to the markets but the economic data supports additional hikes.

“The Fed seems to be on the same page here — that inflation is catching up and we need to deal with slowing down inflation, and that the growth in the economy is strong and we can handle rate hikes,” he said.

Adatia also noted that although the central bank didn’t explicitly say it, it must be anticipating the additional stimulus in the economy that is expected to come once U.S. president-elect Donald Trump moves into the White House.

He wasn’t surprised that Fed chairwoman Janet Yellen didn’t mention Trump in her comments because there’s still a level of uncertainty surrounding what he will actually do once he’s sworn in on Jan. 20.

“It’s hard to mention him because he hasn’t taken the office yet,” said Adatia. “His policies haven’t been enacted yet. You can’t speculate… they had it at the back of their minds, I’m sure.”

The rate hike sent the U.S. dollar higher, dragging the loonie lower. The Canadian dollar dipped US0.80¢ to US75.34¢.

Oil prices also slipped, after reaching record highs this week. The January crude contract lost US$1.94¢ to US$51.04 per barrel and January natural gas advanced US7¢ to US$3.54 per mmBTU.

The February gold contract gained US$4.70 to US$1,163.70 an ounce and March copper contracts were up US1¢ to US$2.60 a pound.