NEW YORK, New York - U.S. stocks made tepid rises on Friday before succumbing to a wave of selling late in the day as investors continued to gyrate over the future direction of interest rates.

The U.S. Federal Reserve is likely to hike rates fifty basis points next week, an expectation already built into markets. What happens next year is occupying the minds of traders more with some seeing inflation peaking and rates coming down. Others see rates remaining high for longer, until such time as a recession emerges.

"It's our expectation that we really need to see inflation come down closer to the Fed funds rate for the Fed to pause, and we still have quite a bit of delta between those numbers," Stephanie Lang, chief investment officer at Homrich Berg told CNBC Friday.

"There's still a bit of work to be done on the inflation front to really see that as the reality," Berg added."

The Dow Jones industrials took the biggest hit Friday, tumbling 305.02 points or 0.90 percent to 33,476.46.

The Standard and Poor's 500 fell 29.13 points or 0.73 percent to 3,934.38.

The tech-laden Nasdaq Composite retreated 77.39 points or 0.70 percent to 11,004.62.

Foreign exchange markets mostly supported foreign currencies. The U.S. dollar fell to the in-demand euro, falling to 1.0540 approaching the New York close Friday.

The British pound swelled to 1.2295. The Swiss franc rallied to 0.9329.

The Australian and New Zealand dollars were robust, rising sharply to 0.6794 and 0.6408 respectiovely.

The Japanese yen was flat at 136.59, while the Canadian dollar was sold off to 1.3633.

On overseas equity markets, London's FTSE 100 edged up 0.06 percent. The German Dax advanced 0.76 percent.The Paris-based CAC 40 rose 0.46 percent.

In Japan, the Nikkei 225 jumped 326.58 points or 1.18 percent to 27,901.01.

The Hang Seng in Hong Kong surged 450.64 points or 2.32 percent to 19,900.87.

China's Shanghai Composite rose 9.60 points or 0.30 percent to 3,206.95.

In Singapore, the Strait Times Index garnered 9.89 points or 0.31 percent to 3,245.97.

The Australian All Ordinaries firmed 36.90 points or 0.50 percent to 7,406.30.

Indonesia's Jakarta Composite Index went against the trend, falling 89.11 points or 1.31 percent to 6,715.12.

In New Zealand, the S&P/NZX 50 dipped 21.11 points or 0.18 percent to 11,596.03.

South Korea's Kospi Composite added 17.96 points or 0.76 percent to 2,389.04.