U.S. stocks closed lower on Friday, as traders and strategists ramped up expectations for additional interest rate hikes this year following hawkish remarks from Federal Reserve Chair Warsh. The S&P 500 slipped 0.3% in choppy trading, with technology shares dragging on the broader market.

All components of the S&P 500 semiconductor index fell, with Nvidia giving back part of Thursday's gains and providing the biggest drag on the index's decline. The tech-heavy Nasdaq 100 dropped 0.7%, while the Dow Jones Industrial Average finished roughly flat. The Russell 2000 slid 1.4%, hitting its lowest level since July. The Cboe Volatility Index continued to ease, settling just above 14 points.

Major indices swung between gains and losses in reaction to Warsh's comments. The newly appointed Fed chair reiterated his reluctance to provide forward guidance and emphasized that inflation has remained persistently elevated. Market pricing now implies a 57% probability of a rate increase by year-end. Barclays economists anticipate the Fed will raise rates in both September and December.

"The equity market has held up relatively well because investors got what they wanted to hear from this speech," said Kate Moore, chief investment officer at Citi Wealth, in an interview. She noted that investors were looking for commentary on the economy, earnings, and inflation targets—all of which Warsh addressed.

U.S. consumer confidence fell for the first time in three months in August, with respondents expressing a dimmer view of the economic outlook, though one-year inflation expectations eased. "Households are still feeling the pinch from cost-of-living pressures," said Daniel Vielhaber, economist at Nationwide. "Going forward, consumer sentiment will remain swayed by the Iran conflict and its impact on gasoline prices."

At the close, the S&P 500 was down 0.3% at 7,711.76 points. The Dow Jones Industrial Average was essentially flat at 53,559.99 points. The Nasdaq Composite declined 0.5% to 26,402.42 points. The Nasdaq 100 fell 0.7% to 29,433.43 points, while the Russell 2000 dropped 1.4% to 2,972.372 points.