While you were sleeping: UPDATED Dow drops the most since Fed rate hike

Stocks on Wall Street fell in quiet trading as broad selling drove the Dow Jones Industrial Average to its biggest loss since the US Federal Reserve raised interest rates.

The Dow declined 111.36 points, or 0.6%, to 19,833.68 after ending Tuesday at its second-highest in history but shy of the 20,000 milestone. The S&P 500 fell 0.8% and the Nasdaq Composite lost 0.9%.

Trading volumes and market swings have been muted in 2016’s final week after expectations for stronger growth, tax cuts and reduced regulation helped propel stocks to record highs this month.

The Dow industrials still remain poised to end the year nearly 14% higher while the S&P 500 is on track to add 10%.

“I’m pretty amazed to see records every day in the U.S. equity market,” Igor de Maack, fund manager at DNCA Investments, told the Wall Street Journal.

“But if you don’t have an acceleration of macroeconomic growth and don’t have a consistent increase in the profitability of America Inc., you should not have that outperformance next year."

Shares of technology and real estate companies were among the biggest decliners in the S&P 500. Nvidia fell 6.9%, paring the semiconductor company’s 2016 gain to 231% while leaving it the S&P's best performing share in 2016. Shares have been bolstered by strong earnings, driven by Nvidia’s gaming unit, which offers graphics processors used in PCs.

Caterpillar fell the most in the Dow industrials, losing 1.5%.

US crude oil added 0.3% to $US54.06 a barrel after settling at its highest price since July 2015 in the previous session. Traders have been waiting to see if major oil producers will deliver on pledges to curtail production starting next month.

The Stoxx Europe 600 climbed 0.3%, following an upbeat session in Asia with miners and energy companies gaining, pushed by an uptick in oil and metals prices.

Markets in Italy and Spain slipped, while the Euro Stoxx Banks Index fell 0.2%.

Shares of Italy's Banca Monte dei Paschi di Siena still weren’t trading after the European Central Bank said the lender had much larger bad loans than previously calculated.